Bed blocking remains a problem in the NHS, according to an influential committee of MPs.

The Commons public accounts committee said on Wednesday that an "intolerable" number of older people are stuck in hospitals despite being well because no care home accommodation can be found for them.

An average 3,500 older patients remain in NHS acute hospitals each day after being discharged because arrangements are not complete for them to move on, the MPs claimed.

The delays cost the taxpayer an estimated £170 million a year and account for 1.7 million lost NHS "bed days" every year.

Ministers have pushed through the Community Care (Delayed Discharges) Act to try to tackle the problem.

By 2004 the Department of Health hopes to eradicate bed blocking completely.

The MPs did acknowledge that the NHS has reduced levels of delayed discharge "significantly" since Labour came to power in 1997.

But committee chairman Edward Leigh called on the government and care providers to work together to better plan the provision of accommodation.

"It is important that older people are discharged from NHS acute hospitals as soon as they are fit to leave, both for their own welfare and to avoid tying up hospital beds and resources that are already under pressure," he said.

"The department and the NHS have reduced delays since 1997, but it is intolerable that on any given day there are 3,500 older people waiting in hospital even though they are fit to be discharged.

"There is an urgent need for the department, health authorities, trusts and independent providers to work together better to plan care provision."

Liberal Democrat spokesman Paul Burstow said more investment was needed in the provision of care homes.

"The crisis in the care of the elderly is widening, deepening and fast approaching meltdown," he said.

"The victims of emergency readmissions are the frail elderly who find themselves caught up in a game of pass-the-parcel between health and social care services.

"Failure to invest in preventative home care and high quality care homes denies people choice and is a false economy.

"Taxpayers' money is wasted on keeping people in hospital or readmitting the elderly to NHS beds, when what they need is good care at home, or a good care home."

And shadow health secretary Dr Liam Fox said the problem was "of the government's own making".

"Promises that this crisis will be resolved are simply not enough. As the PAC said, this situation is intolerable," he said.

"This state of affairs is entirely of the government's own making. They were warned by experts to allocate proportionate funding to care homes to balance that going into hospitals, but ministers refused to listen.

"As a result 74,000 care home places have been lost since Labour came into power. Up and down the country elderly patients are suffering. The government should be ashamed."