Ministers claimed their outline proposals were "bold and ambitious" and the biggest change to the welfare state since 1948.
But they admitted the service would not be in operation until after 2015, as a cross-party National Care Commission will first examine how people will pay for it.
Among the options will be a so-called "death tax" of 10 per cent on estates, which will remain up for discussion despite earlier suggestions by Chancellor Alistair Darling that it was being ruled out.
Ministers were immediately accused of kicking the plans into the long grass and campaigners called for urgent action to sort out how long-term care will be funded.
Under the Government's proposals, a comprehensive and free service based on need rather than the ability to pay will be created.
It will be available to everyone who needs care when they are old or disabled and will be based on a principle of shared social insurance funded by contributions from everyone "in a fair way" which will protect people from the expensive care costs arising from long-term care needs.
But the precise details of how to fund the service, which will cost 3bn in its first year, will be determined by the Royal Commission as Ministers claimed a consensus was needed before plans went ahead.
Health Secretary Andy Burnham said: "Like the NHS, everyone will contribute and everyone will get their care for free when they need it. This is the biggest change to the welfare state since 1948 and, like the NHS, it's going to take time to build. I feel very strongly that this is a responsibility we must all help to shoulder."
But the Tories, who propose a voluntary 8,000 one-off premium at 65 to guarantee free care, ridiculed the blueprint.
Tory Shadow Health Secretary Andrew Lansley said: "We seem to have arrived at the point where Andy Burnham is saying he wants everyone to have free care but he doesn't know how to pay for it."
Liberal Democrat health spokesman Norman Lamb said: "After 13 years in power spent ducking social care reform, we probably shouldn't be surprised that Labour has once again hit it into the long grass.
"Seeking consensus is the right approach but that will only work if the cross-party commission is free to consider all ways of funding social care, not just Labour's preferred policy."
The charity director for Age Concern and Help the Aged, Michelle Mitchell, welcomed the move. She said: "The idea of a National Care Service sounds fantastic. Almost everyone can agree with the principle of a new system that guarantees more flexible support, earlier help and clear national entitlements rather than a postcode lottery of unmet needs.
"But if it isn't adequately funded, the vision of a new national care service cannot be delivered and will ultimately fail the most vulnerable people in our communities."
The Labour peer who led opposition to the proposed service in the House of Lords, Lord Lipsey, said the latest proposals did not make sense.
"This system proposed by the Government today is unfair because it is going to mean the poor paying money, but the benefits going to the better off," he said. "It is unaffordable, even more expensive than the proposal that I was attacking in the House of Lords, and, worst of all, it doesn't provide the better services that elderly people and their carers really need."
THE LONG AND WINDING ROAD TO CHANGE
A commission will be set up to advise the Government on the fairest and most sustainable way people can contribute to a free National Care Service
Experts will be called in to advise Ministers on how to implement the service for the elderly and disabled
Eligibility criteria for social care will be enshrined in law to remove the postcode lottery of care that exists now
The service will be introduced but not until 2016 at the earliest
It will be universal – supporting all adults with care and support needs - and free at the point of use based on need, rather than the ability to pay.