The study focused on 418 people recruited from primary care. All were aged over 50 and had reported knee pain for more than six months.
Participants were assigned to routine GP care alone, or a 12-session exercise programme to be attended alone or in small groups. This consisted of weekly 30-minute sessions in which patients used equipment to strengthen the quadriceps muscle.
Using the Western Ontario and McMaster Universities OA index (WOMAC) as a measure of function, the researchers assessed participants six months after completing rehabilitation.
Of the 342 patients who completed the trial, those who attended exercise classes had a better functioning score - around three points lower - than those given usual care.
Lead researcher Professor Mike Hurley, an expert in physiotherapy at King's College, London, said: 'The study also evaluated the costs of the intervention, which were shown to be relatively small and more cost-effective than usual care, so decision-makers can see they can easily afford it.'
The Arthritis Research Campaign says the findings are being considered by NICE, which is currently working on a draft clinical guideline for OA, expected in January 2008.
Dr Adam Bajkowski, Wigan GP and chairman of the Primary Care Rheumatology Society (PCRS), said: 'Exercise in any form is beneficial. Patients with OA won't get the best care if they are not receiving exercise.'
The PCRS has made unsuccessful submissions for OA and interventions such as exercise to be added as quality points.
Dr Bajkowski said that too few patients were offered structured exercise because there was no system to review OA patients in primary care.
He added: 'I'm hoping that NICE will endorse this so that when we try to get it in the quality framework we can say it's what NICE advises.'
Comment below and tell us what you think