The government has outlined plans for identity assurance services to be used across all online public sector services.
The intention is to create a market of private sector identity assurance services, allowing the public to choose the provider of their choice to prove their identity when accessing public service, said Cabinet Office minister Francis Maude.
The plans follow the government's drive to move a substantial number of public services to online-only.
"Online services have the potential to make life more convenient for service users as well as delivering cost savings. However, currently customers have to enter multiple log-in details and passwords to access different public services, sometimes on the same website. This involves significant duplication, is expensive to operate and is highly inconvenient for users," said Maude in a Parliamentary statement.
"It acts as a deterrent to people switching to digital channels, hampers the vision of digital being the primary channel for accessing government information and transactions, and provides an opportunity for fraudsters," he said.
The Cabinet Office will lead the project to develop the market for identity assurance services and expects to have a first prototype of the identity assurance model by October 2011, with a date for implementation from August 2012.
But Michael Parker, from campaign group No2ID, warned the system should not turn into a new iteration of ID cards. "There's no reason this couldn't turn into ID cards mark two. There must be clear laws limiting the powers of government departments from compiling huge databases on people and sharing private information with each other."