My father is 84. He looks much as he did 20 years ago, except his beard had to go because it proved a trap for food when he was being fed. Last week the barber he had visited for years, but whom he no longer recognises, shaved his cheeks bare - another small but necessary indignity that visibly marks the loss of his identity. One pitiful consolation is that he won't remember.

My dad spent a lifetime in love with language - esoteric meanings, puns, poetry, jokes (often very blue), plus his own set of catchphrases that, just occasionally, could grate. How we long to hear them now. 'I've had an elegant sufficiency,' he would say with a flourish at the end of every celebratory meal. Now, he says little. He smiles occasionally as if to signal that his sense of humour, always strong, will be the last part of him to die.

In addition to his mother tongue, Welsh, he could speak Spanish, English and Italian, and had a good go at Urdu, Korean and Greek. In his seventies he had begun to teach himself Russian. He loved to play with words - a pleasure perhaps particularly common among those who left school early after a hard childhood - and developed a voracious appetite for learning.

My dad had an active brain. After the Navy, his job as a Morse code operator with the Foreign Office took him around the world. He mixed with bullfighters in Spain; learned to fly Tiger Moths and rode horses with friends in the Pakistani army in Peshawar; sailed on the Nile with a CIA 'adviser' in Sudan; and took up golf in Korea.

My parents' house overflows with his hobbies: stamp collecting, photography, history, gardening, metal detecting. There are the remnants of a domestic distillery that for years kept the neighbours happy; and, of course, the teach-yourself-Russian tapes. All that cerebral activity, however, failed to inoculate him against the plague of the over-eighties. My father was diagnosed with Alzheimer's disease earlier this year, as was his sister, Megan, now 88, several years before.

Nothing special in that. Theirs is a common story for octogenarians, one in five of whom suffers from Alzheimer's. The struggle of my mother Nancy, aged 82, to care for my father, while simultaneously mourning the loss of the man she married 60 years ago this April, is familiar to untold thousands of elderly people, themselves fragile.

Their plight is somewhat ignored, since they make few demands. They are the generation grateful to have survived the war and reared not to make a fuss, unlike their children. Besides, to many people Alzheimer's carries a stigma - another reason to remain in the shadows. According to one estimate, only 10 to 15 per cent of people with dementia have had the disease diagnosed. So we have yet to comprehend fully the unrelenting scale of what is endured by sufferers and those who care for them. As a result, we also appear not to take too much notice. At least until, suddenly, it's not 'old people' with Alzheimer's but our own mother and father. Or us.

What can we do to help, we who look on sometimes helpless, often frustrated, as our closest and most loved family and friends succumb to the illness? Of course, there are drugs. Thirty studies and half a dozen clinical reviews provide irrefutable proof that four dementia 'treatments' help a large proportion of people with Alzheimer's to function better for a period of time. They also reduce the destructive processes that kill off the brain cells - although they would do little for my father.

The drugs cost ?2.50 per patient per day - ?1,000 a year. That cost can be recouped if the people with Alzheimer's for whom the drugs work can be kept out of a nursing home for a month because of improved functioning.

And this is where the problems start. In March last year, Nice - the National Institute for Clinical Excellence - announced that it was proposing to issue new guidance to withdraw all four drugs from the NHS, on the grounds that they were effective but too costly. Nice, an independent organisation set up by the government to offer clinicians and managers clear guidance on the treatments that work best and on their cost-effectiveness, is expected to announce its final decision tomorrow.

A public outcry followed its initial suggestion. John Reid, then the Health Secretary, suggested in an unprecedented move that Nice might look again at its original appraisal. Andrew Dillon, chief executive of Nice, responded: 'We think there is more data which could affect our decision, and we are asking the drug companies for access to it.'

A range of organisations, individuals, MPs and medical professionals pointed out that it was Nice's original 'data' that was the problem. They charged that it was erroneous, incomplete and lacked transparency and clarity - some of the criticisms that the House of Commons Select Committee on Health had made in a critical report on Nice a couple of years earlier.

So, has Nice redeemed itself? Tomorrow Nice will publish its new guidance on the four dementia drugs. Sources suggest that they will reverse their earlier proposal to strike these drugs off the NHS list of approved treatments. Instead they will show that they have listened to the critics and will allow the drugs to be given to patients who have 'mild to moderate' dementia. However, it seems that patients with severe dementia will not be eligible for the drugs. This will prove controversial, as some psychiatrists felt that the treatments could really help alleviate some of the worst symptoms, such as aggression.

'If that is the decision,' says Dr David Wilkinson, head of one of the first memory clinics in the UK, the Memory Assessment and Research Centre in Southampton, 'then it's a great help in one way because it keeps the services alive. But for some patients, it will mean frustration.'

Nice has a reputation for excellence, although critics can be scathing. 'The acronym is misleading,' says Professor Robin Jacoby, emeritus professor of old age psychiatry at Oxford University. 'I say it stands for the National Institute for Cutting Expenditure.' The body has to make difficult decisions conscious of the political demands of the minister, the power wielded by leading pharmaceutical companies, and the demands of patients, who have successfully used the courts to gain access to the expensive drugs they need.

In that fraught setting, Nice has to come to a decision about which drugs are both health and cost effective, using a complicated 'model' - a mathematical system that attempts to assess price and effectiveness, called a final cost per quality adjusted life year.

How good a job has it done in the past five years on weighing the four dementia drugs? Critics say that the criteria on which Nice assessed the dementia drugs, the absence of a single representative of old age psychiatry on its appraisal committee and the opaqueness of its method (at least a PhD in health economics is required to achieve even a glimmer of understanding) raises issues about the narrow way in which 'value' is measured in health economics in the NHS, to the detriment of the elderly in particular. 'Is it "worth" the investment? [That] means different things to the NHS, to administrators, politicians and the punters,' says Jacoby. 'So, to whom do we listen?'

Another issue is whether Nice, an unelected body which critics say lacks transparency, is the right arena to decide who has priority and what treatments are rationed in an acutely cash-strapped, NHS. In short, the dilemma that Nice has had trouble in resolving is precisely the one that society would prefer to avoid - are the elderly worth the money they require for a life worth living?

Keith Turner, 67, father of four and a diabetic, is a retired chiropodist. In 2002 he gave up reading because, by the time he came to the end of the sentence, he couldn't remember the beginning. 'It was a little bit of a joke in the family, dad's getting old ...' he smiles. On a routine diabetes check, his consultant asked if there was anything else he could do to help. Keith's wife, Lillian, said: 'I wish you'd give my husband a memory.' An appointment was made with a neuropsychologist for which Keith had to wait a year. Eventually, he was diagnosed as being in the early stages of AD. 'You can't change the rules. You try and make the best of it,' he says. 'I'd go shopping with my wife. I'd forget and wander away. She could never leave me. It was a lot of worry.'

Two years ago Keith was put on Aricept, one of the four dementia drugs that Nice may propose withdrawing from the NHS tomorrow. 'I saw an improvement in a matter of weeks. It's still brilliant. I can drive again; I can remember; I can hold a conversation; I don't wander away. It's given me back my life.'

In 2001 Nice was equally enthusiastic. It recommended that three of the drugs, Aricept and Exelon, introduced in the late Nineties, and Reminyl, introduced in 2000, should be used in the mild-to-moderate stages of AD. The brains of people with AD lack acetylcholine, one of the chemicals associated with memory, learning and communication. These three drugs, known as inhibitors, as well as a fourth drug, Ebixa, introduced in 2002 and used in the moderate and severe stages of AD, slow the rate at which acetylchline breaks down.

The drugs work for only around 60 per cent of patients. They are effective for up to 18 months. The drugs buy time. 'The degree of change varies. It may mean, for instance, a man can go to the post office and remember why he's there. It means remembering grandchildren's names,' says Wilkinson. 'It can allow a person to dress himself and cope alone.'

He gives the example of an 87-year-old woman whose husband was diagnosed with the disease. The woman said her husband was a good man until he was diagnosed with AD. One night he woke her and chased her down the stairs, locking her out in the pouring rain in her night dress while he screamed 'Whore!' and 'Harlot!'. 'What these drugs can do is to stop that for a period. For some couples, that extra time is priceless,' Wilkinson says.

It takes 32 months to acquire a diagnosis for AD in the UK. In Germany, it happens within ten months. In Italy, 80 per cent of people with AD are offered drugs - here the figure drops to 20 per cent. Since the new regulations imposed by Nice, clinics have sprung up that make a diagnosis quicker while also monitoring the drugs regime and providing emotional support.

In March 2005, however, Nice suggested that only Ebixa should be prescribed as part of a clinical trial. Nice estimated that, if the drugs were no longer available on the NHS, ?15m would be saved in year one, ?45m in year two and ?60 million in year three.

Carers immediately objected to the way in which Nice had made its calculations. 'Without Ebixa I believe my wife would have had to go into a care home 12 months earlier,' said the husband of one woman receiving Reminyl and Ebixa. 'Ebixa costs ?132 per month. A care home costs ?400 in England and ?675 in London a week. The drug treatment was more cost-effective and has helped to retain our quality of life. It also has the benefit of being available when needed, which cannot be said of support services.'

The Alzheimer's Society argued that the 'model' that Nice employs is not able to capture the change in the quality of life for dementia patients that the drug treatments provide. 'It's a crude tool that measures what's easiest to measure,' explains Wilkinson. 'It doesn't calculate the impact of the whole syndrome of the disease.'

Tomorrow Nice reveals if it has listened to its critics. Will it have reviewed the way in which it calculates 'value', in the context of those with dementia? Will all four drugs now be prescribed within the NHS, or will new restrictions be imposed? Soundings suggest that it will give the go-ahead, but with strict criteria.

At present the only definitive diagnosis for Alzheimer's is via a post mortem that reveals the holed, cauliflower state of the brain. When the patient is still alive a clinician has to make a series of assessments, under current Nice guidance. They include tests. Central to these is the mini mental state examination, MMSE. Nice dictates that an individual has to achieve a score of at least twelve to be eligible for dementia drugs.

I sat in his surgery while Wilkinson conducted an MMSE test on a man in his late sixties. I struggled with some of the questions (count backwards from 100 in sevens) demonstrating that I have either inherited my father's disease or, bizarrely, my IQ isn't high enough to demonstrate that I don't have dementia.

Wilkinson gave the patient, weighed down by a combination of anxiety, fear and a desire to please, an address and asked him to repeat it a few minutes later. He failed. He was shown a picture and asked, within minutes, to list the contents. He half failed.

The Alzheimer's Society has pointed out that the test, the key to dementia drugs, discriminates against people whose first language is not English or who lack the cultural knowledge or mathematical ability to respond under pressure.

'My mother failed an assessment test, gaining less than ten points,' says one carer for a 79-year-old with AD. 'She was very upset and apologetic. Looking back I realise that she probably suffered from dyslexia . The consultant said he could not prescribe Aricept any more. I begged him to change his mind, but he would not relent. My mother went downhill rapidly after that. About two months later her ability to converse ceased.'

The months of campaigning to push Nice to change its appraisal has also focused attention on the grossly inadequate levels of help for those with dementia and their carers in some areas of the UK and raised yet again the issue of who should foot the bill for the cost of adequate care.

Is it right that in England and Wales, but not Scotland, the patient with dementia is expected to pay for his or her own treatment? Are we, as taxpayers, prepared to fork out more? Would the extra cash make its way to the elderly, when other demands are pressing and ageism rife?

Health and social care professionals are doing the best they can, but the lack of resources often means they are forced to police a brutally inadequate regime of 'support'. My father had been ill for several months. My mother cared for him and I, along with my husband, provided weekend help, although we lived 70 miles away. My dad was incontinent; awake all night and roaming. He was difficult to wash and dress .

A well-meaning social worker said my mother could have half an hour of help in the morning and night. If any task was not achieved in the allotted time, the staff would have to leave. My mother could also have stair rails. A day centre was arranged for one day a week. More time was unlikely because of the length of the waiting lists.

My mother stayed up all night for fear that my father would fall down the stairs in his wanderings. She weathered his delusions with the support of an inspirational community psychiatric nurse - who came once a week. But without sufficient help, my mother too has buckled.

In 2003, 2004 and 2005 a succession of investigations, including those by the King's Fund and a coalition of charities involving Age Concern and Help the Aged, said that, in spite of a series of government initiatives, advocating independence and high-quality care, in practice services for the elderly are in crisis. The old are being robbed of their resources.

Although two-thirds of those who receive local authority help are elderly, they receive under half of the funding. The money is 'creamed off' for families and children on whom a much brighter spotlight is trained. The coalition's chairwoman Annie Stevenson said last year: 'Older people are paying for inadequate social care funding with their own mental health, physical health and dignity.'

My father has suffered a series of small strokes and is now receiving good care in an NHS psychiatric ward. We are fighting to keep him within the NHS system because he is ill and it's his right. 'He's paid taxes since he was sixteen and never claimed a penny in benefits,' my mother says. 'Why should he pay for his own care now that he's ill?'

A cost-effective manifesto for those with dementia would include access to Alzheimer drugs within the NHS with clinical judgments on who needs them left to GPs and specialists. There should also be adequate support in the home for people with dementia and, crucially, their carers, and decent standards in nursing homes, financed out of taxes.

I know it would be expensive. But as the cases of Alzeimer's increase and the number of elderly increase, it is important that we make the decisions to support the sufferers and those that care for them. If my dad could find his voice again, I think that he would agree.