The Liverpool care pathway is to be abolished following a government-commissioned review which heard that hospital staff wrongly interpreted its guidance for care of the dying, leading to stories of patients who were drugged and deprived of fluids in their last weeks of life.

The government-commissioned review, headed by Lady Neuberger, found it was not the pathway itself but poor training and sometimes a lack of compassion on the part of nursing staff that was to blame, while junior doctors were expected to make life-and-death decisions beyond their competence after hours and at weekends. The review says individualised end-of-life care plans must be drawn up for every patient nearing that stage.

"Caring for the dying must never again be practised as a tickbox exercise and each patient must be cared for according to their individual needs and preferences, with those of their relatives or carers being considered too," said Neuberger. "Ultimately it is the way the LCP has been misused and misunderstood that had led to such great problems."

She said it was too late to turn the clock back and salvage the LCP, which was devised to try to extend the positive experiences of dying hospice patients into the hospital setting. But in replacing it, the NHS must make care of the dying part of its core business, she said.

"What we have also exposed in this review is a range of far wider, fundamental problems with care for the dying – a lack of care and compassion, unavailability of suitably trained staff, no access to proper palliative care advice outside of 9-5, Monday to Friday."

The government confirmed it would phase out the LCP and said it would require all hospitals to review the care of dying patients. Every such patient should in future have a named senior doctor in charge of their care.

The care minister, Norman Lamb, said: "We hope the actions we have taken today will reassure patients and their families that everyone coming to the end of their life is getting the best possible care and that concerns are being dealt with swiftly.

"I have personally heard families describe staff slavishly following a process without care or compassion and leaving people suffering at the end of their lives. This is something we cannot allow to go on.

"People's final days should be as comfortable and dignified as possible. That is why there is a place for thoughtful and careful end-of-life care that involves patients and their families, but it is clear what we have now needs to be replaced so we can create a better way of doing this."

The review listened to harrowing stories from families who had not been told their loved one was expected to die and, in some cases, were shouted at by nurses for attempting to give them a drink of water. Nursing staff had wrongly thought, under the LCP guidance, that giving fluids was wrong. Some patients were put on the pathway and treatment was withdrawn, only for them to make a recovery, albeit temporarily. Communication was very poor and medical staff sometimes dodged painful discussions with patients and families, the review found.

The review strongly criticised the Nursing and Midwifery Council, which – unlike the General Medical Council, which regulates doctors – offered no guidance to nurses on the care of the dying. That must change "as a matter of urgency", said Neuberger.

The NMC said it was already looking at standards of conduct, performance and ethics of nurses, following the Francis report into Mid-Staffordshire hospital. "In light of the independent review into the Liverpool care pathway the NMC must make sure that it is issuing the right guidance for nurses and midwives," it said. "We will be working with relevant stakeholders and studying the recommendations laid out in this review."

Jane Cummings, chief nursing officer for England, said: "I would like to reassure everyone, particularly patients on the LCP and their families, that NHS England and the NHS is passionate about ensuring that every patient receives the best possible care at the end of their life. I have been a nurse for over 30 years and know how important care at the end of life is for our loved ones. I say this both on a professional and a personal level.

"The review and NHS England recognise the good principles of end of life care in the LCP, but there have been failings in the quality of care in some areas and this is never acceptable. Caring for someone when they are dying is difficult and emotional even for experienced healthcare professionals. But the NHS exists to provide personal and compassionate care to patients and their loved ones when they most need it. Most of the time we do get it right but we have to get it right for everybody. Issues such as poor communication with relatives have nothing to do with any particular care plan. That is just poor care and we don't want it in the NHS."

The review makes 44 recommendations, including the phasing out of the LCP over six to 12 months as individual care plans for the dying are brought in. It says that only senior clinicians must make the decision to give end-of-life care, along with the healthcare team, and that no decision must be taken out of hours unless there is a very good reason.

It says there must be no incentive payments to hospitals to put patients on end-of-life care, as occurred with the pathway. This was intended to offer encouragement to adopt best practice but has been interpreted as payments to speed up patients' demise.