Tens of thousands of Alzheimer's sufferers will be denied the chance of a normal life because of a decision to save £2.50 a day on their treatment, charities and health professionals said.
They are considering asking for a judicial review of what they claim is a flawed ruling not to make available a series of dementia drugs for sufferers.
The National Institute for Health and Clinical Excellence (Nice) rejected an appeal against guidance that the treatments should only be used for people with moderate Alzheimer's.
Neil Hunt, chief executive of the Alzheimer's Society, said: "We are extremely unhappy and we are very angry as what we see as a kick in the teeth for millions of people."
Help the Aged said it was "botched policy-making at its worst".
Doctors fear they will be left in the "unethical" position of having to turn away patients with the early stages of the disease.
Thanks to their treatment, many have been able to return to normal lives despite having reached the stage where they could not recognise close relatives.
The Alzheimer's Society says that 750,000 people in Britain suffer from dementia, 57% of them from Alzheimer's, while hundreds of thousands more are involved in their day-to-day care.
By 2010, the figure for dementia sufferers is expected to rise to 840,000 and by 2050 to 1.5 million. Experts believe it is under-diagnosed.
Nice chief executive Andrew Dillon said: "Alzheimer's is a cruel and devastating illness and we realise that today's announcement will be disappointing to people with Alzheimer's and those who treat and care for them, but we have to be honest and say that, based on all the evidence, including data presented by the drug companies themselves, our experts have concluded that these drugs do not make enough of a difference for us to recommend their use for treating all stages of Alzheimer's disease."
