A £50 million pot of lottery cash will be spent on helping children raised in care and people who look after dementia sufferers, it was revealed today.

The news coincided with an announcement from the First Minister that the Government will launch its dementia strategy next month.

Alison Magee, chairwoman of Big Lottery Fund Scotland, said: "The aim is to support people in need. We want this £50 million investment to be long-lasting, long-term and to achieve real change."

She said about 70,000 Scots have dementia and the number of sufferers is set to double within 21 years at a cost to the economy of nearly £3 billion.

There are currently around 15,000 children who are being raised in care in Scotland.

Ms Magee said only 1% of youngsters raised in care go on to study at university. Half of all prisoners in Scottish jails have been in care and 80% of prisoners convicted of violence have been in care.

She said decisions on how to spend the cash, allocated from a £400 million lottery pot for Scotland, have yet to be made.

Ms Magee said talks with relevant organisations are due to start, with a detailed breakdown of spending likely to be announced at the end of the year.

The funding is expected to benefit youngsters who leave care like Jennifer Bailey, 19, from Broxburn, who was raised in a foster home.

She will move into her own flat on March 22 thanks to the support of the Edinburgh charity The Rock Trust.

Former civil servant Roz Gray, 53, from Edinburgh, revealed she has spent the last six years caring for her parents Duncan and Kitty Campbell, who both have dementia.

She said she would have been "absolutely lost" without the assistance of support networks. Ms Gray said she hoped the funding would help more families "take advantage of the help available for them".

First Minister Alex Salmond welcomed the funding and said it was a "substantial sum" that "will make an enormous difference". He also praised the work of charities and voluntary organisations working in the field.

The Government is due to launch its dementia strategy next month. Mr Salmond said: "It is a transformational approach in terms of how we confront and address this issue in society."

He also said the Government is implementing the 2007 Adoption Act to "help more young people find permanent homes".

Figures released last month revealed that the number of children in care has reached its highest level for almost 30 years.

Official statistics showed that at the end of March last year there were 15,288 youngsters in care across Scotland - 3% more than the previous year and the largest number since 1983.

The Scottish Government recently published new legislation aimed at improving the children's hearing system.

The Children's Hearings (Scotland) Bill will create a new national body with a convener, who will be responsible for setting standards for the recruitment, support and training of local children's panel members.

The children's hearing system was set up in the 1960s to deal with youngsters who were in trouble or at risk.

It is based on the system of local people in the child's own community making decisions about how best to help and there are currently more than 2,500 volunteers who sit on local children's panels.

Henry Simmons, chief executive of Alzheimer Scotland, said: "Investment such as this will go a long way towards making life better for everyone affected by this illness. "

Lib Dem education spokesman Hugh O'Donnell said: "I welcome this move by the Big Lottery Fund. Children leaving care and elderly people suffering with dementia are some of the most vulnerable people in society.

"This is a good use of lottery money. Anything that can be done to make life easier for these groups of people should be welcomed.

"We are pleased that the money is also going to help carers of vulnerable people. It is so important that we recognise the hard work that carers undertake in Scotland."

Jennifer Davidson, director of the Scottish Institute for Residential Child Care, said: "Young people leaving care too often experience extremely difficult transitions due to a lack of support and services.

"We are delighted that the National Lottery has seized the opportunity to make a real difference to this particularly vulnerable group of young people.

"We welcome the recognition that these young people have a great deal to contribute when they are given the right support and opportunities."