The controversial ID cards project could be dropped as the government starts to look at cutting public expenditure in the wake of the recession.
Cabinet ministers have started looking at public spending cuts, with the ID project high on the list of possibilities.
A £175bn budget deficit is expected by the end of this financial year, and Liberal Democrat Treasury spokesman Vince Cable said scrapping ID cards would be one of a range of measures necessary to plug the deficit.
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The ID cards project is already fairly well advanced leading to some questions over how much money it might save.
IT management expert Colin Beveridge said some suppliers may have written in clauses to their contracts that would ensure compensation if the scheme was cancelled. The clauses are designed to deter cancellation on change of government.
"If so, once again, the major winners will be the technology providers and the major losers will be the taxpayers," he said.
The Home Office has denied that the scheme will be dropped, but the BBC reports that chancellor Alistair Darling is speaking to ministers about identification of possible cuts in their departments.
The government's most recent report on ID cards, in June, set out its plans to continue rolling out the scheme. The Safeguarding Identity Strategy says the Identity and Passport Service is leading the development of an identity services strategy.
It says, "The vision for the NIS is that it will become an essential part of everyday life; underpinning interactions and transactions between individuals, public services and businesses and supporting people to protect their identity."