Tony Blair yesterday promised to achieve a 40% increase in adoptions by 2004-05.

A white paper foreshadowing the biggest shake-up of adoption law for 25 years proposes financial allowances for adoptive parents and a streamlined system to reduce the time children spend in council care.

There would also be a new status of "special guardianship" for children needing a permanent home, but not wanting to sever links with their birth parents.

Ministers said this could be suitable for hundreds of older children who wanted to keep their original family name - and Muslims who have religious and cultural difficulties with full, legal adoption.

Alan Milburn, the health secretary, said: "Children stay in the care system for longer than they should. More than 28,000 children have been in care continuously for more than two years."

He promised national adoption standards setting out what children and parents involved in the adoption process can expect.

Local authorities taking children into care will have to produce a plan for their future within six months. If that involves adoption, a family should be found within a further six months. This would be faster than the average of 16 months before a decision on whether a child should be adopted is made and another seven before the child is placed with an adoptive family.

A task force will tackle poor performance in social services departments and adoption services could be removed from failing authorities.

An adoption register for England and Wales will be drawn up by July to match children with adoptive parents from across the country, in case a local family cannot be found.

People wanting to adopt will gain the right to an independent review if their application is rejected. The government will organise panels to look again at the evidence and tell the relevant adoption agency if it should reconsider.

The white paper said: "No child should be denied loving, adoptive parents solely on the grounds that the child and the parents do not share the same racial or cultural background." Prospective parents "will not be automatically excluded from adoption on grounds of age, health or other factors, except in the case of certain criminal convictions". But there are no plans to change the law which allows only married couples or individuals to adopt. This means that cohabiting couples and homosexual partners will still not be able to adopt together.

After adopting a child, families will have the right to ask for a wide range of support services from the local authority.

They may qualify for a new adoption allowance, including one-off payments for a house extension or larger car, time-limited payments for counselling, or regular payments to cover the cost of visiting birth families.

The government is also proposing 18 weeks of paid adoption leave for one adoptive parent, bringing adoptive parents' rights into line with those of birth mothers with regard to maternity leave.

Mr Milburn promised £66.5m to improve adoption services over the next three years. The money will come from the quality protects programme announced in September. The target is to increase numbers of adoptions from 2,700 this year to at least 3,780 within five years.

Mr Blair, who has given strong personal support to adoption reform, told yesterday how his father, Leo, was fostered when his travelling entertainer parents left him with a couple they met on tour. "In those days there weren't any rules at all. I don't think my grandmother would have passed any tests...But then a framework of rules grew up in a random and ad hoc way. Now is the right time to get back to basics and ask what we want to achieve for children," he said.

Felicity Collier, chief executive of the British Agencies for Adoption and Fostering, said: "We welcome the high profile which is being given to adoption and in particular the personal interest and commitment of the prime minister.

"The biggest problem facing local authorities and adoption agencies is a shortage of families coming forward to adopt. These measures will make a real difference."

Moira Gibb, president of the Association of Directors of Social Services, said its members backed the reforms. The government inquiry "found little evidence of an institutional anti-adoption culture within social work. We have the second highest percentage of children adopted from care in the industrialised world," she said.

Rita Stringfellow, chairman of the Local Government Association's social affairs and health executive, said: "I am delighted that this white paper brings adoption legislation in line with the Children Act and provides a clear duty for health authorities to provide comprehensive post-adoption support services."

Main points

• National target to increase number of adoptions of children in care by 40% over five years;

• councils to decide whether adoption is appropriate within six months and find a family within a further six months;

• a national adoption register to be drawn up by July to match children with parents;

• independent reviews for people rejected as adopters;

• adoption allowances and 18 weeks parental leave for adopters;

• new status of "special guardianship" for children needing a permanent home, but not wanting legal separation from birth parents.

• £66.5m over three years to improve services and support for adoptive families;

• a children's and family court support service to be set up in April to streamline legal procedures.

Useful links
www.doh.gov.uk/adoption/whitepaper
The white paper in full