A review of the policy is to be carried out

But the independent study, commissioned by the Joseph Rowntree Foundation, said the biggest spenders did not always provide the best service.

The report also suggested Scottish Executive underfunding was one of the main problems with the system.

The new executive has already commissioned a review of the scheme.

About 50,000 elderly people benefit from the allowance, most of them receiving help with washing, dressing and eating in their own homes.

Fell short

The research showed the spending by councils varied from �1,500 a year per person in North Ayrshire to �8,000 a year in nearby Argyll and Bute.

"It is difficult to envisage what circumstances would lead to such huge differences in costs between local authorities carrying out the same legal duty across a range of clients who do not differ substantively in their needs or condition," said the report.

The executive spent �237m last year on providing free personal care.

However, the study found that nearly all Scottish councils thought executive funding fell short of what was needed.

The funding of the policy needs to be adequate to prevent any 'rationing' or reduction of services offered Professor David Bell

"They welcome the fact that evidence of numbers receiving personal care is now emerging," said the report.

The study, by Professor David Bell, Alison Bowes and Alison Dawson from Stirling University, found the policy was generally working.

The authors said the policy had brought help to many pensioners for the first time and significantly boosted the overall level of support available.

The number of people receiving free personal care rose by 17,000 between July 2002 and September 2005.

Professor Bell welcomed the SNP government's decision to commission an independent review of the policy and said the funding issue must be addressed.

"Firstly, there needs to be transparency about entitlements, with local authorities being clear on how they fulfil their responsibilities," he said.