The deal is worth �27m in the next financial year

The executive also said it hoped the settlement would give reassurance to thousands of residents and their families.

Scottish Care said the deal equated to a �27 increase per resident per week, and it would be in addition to an annual inflationary fee rise.

Joe Campbell, chairman and chief executive of Scottish Care, claimed care for residents was the organisation's primary concern during the dispute and that no residents had "suffered in any way from the chronic under funding we have experienced over the years".

He said: "Sadly many homes have been forced to close in recent years but we are heartened by the minister's clear intention of reversing this trend and ensuring the independent sector has the major role to play in the long term care and domiciliary care of the elderly in Scotland."

'Hard work still needed'

He added: "Scottish Care has pledged to work closely with the authorities in an effort to form true partnerships which will be advantageous to the elderly and to taxpayers.

"We will do all we can to assist hospitals with their blocked bed crisis, but our members must be afforded proper funding and proper conditions in order to be able to do all of this."

An executive health department spokesman welcomed the umbrella group's decision to recommend the deal to its members.

But he added: "We recognise that there is still a lot of hard work to be done in achieving the longer-term improvements in fees that everyone agrees is needed."