The study, funded by the Medical Research Council and Alzheimer’s Society, involved 295 people who had been diagnosed with moderate to severe Alzheimer’s disease.
The main objective of the trial was to find the effects of continuing the drug donepezil against not continuing it.
The drug is usually withdrawn during the later stage of the disease as it has long been perceived to present no further benefit.
Scientists at University College London (UCL) carried out the Domino trial and found that withdrawing donepezil doubled the risk of nursing home placement after a year.
Researchers said Memantine was not found to have any effect on risk of nursing home placement.
UCL professor of old age psychiatry Robert Howard said: "Our previous work showed that, even when patients had progressed to the moderate or severe stages of their dementia, continuing with donezepil treatment provided modest benefits in cognitive function and in how well people could perform their daily activities.
"Our new results show that these benefits translate into a delay in becoming dependant on residential care, a point that many of us dread.
"We are all impatient for the advent of true disease-modifying drugs that can slow or halt the Alzheimer process, but donepezil is available right now and at modest cost."
About 70% of care home residents in the UK have dementia or severe memory problems.
In 2001, the National Institute for Health and Care Excellence approved the use of three anticholinesterase inhibitors, including donepezil, in the early and moderate stages of Alzheimer’s.
The drugs were the first treatments to be approved for the Alzheimer’s disease as they reduced its symptoms.
Image: In the UK, 70% of care home residents have dementia or severe memory problems. Photo: courtesy of University College London.