David Blunkett has announced that the government is to work towards building a UK-wide computerised identity database immediately - the first steps towards the creation on a compulsory national identity card scheme.
The Home Secretary estimated the project could cost between £1.6bn and £3.1bn and could take 10 years.
The first stage will be to set up the technology for a computerised biometric passport scheme in the next two or three years with driving licences to follow two years later.
Mr Blunkett said that by 2013 he expected 80% or more of the population to have effective ID cards through biometric passports or driving licences, paving the way for a compulsory scheme provided the Cabinet of the day approved it and Parliament voted in favour of it.
Politicians and IT experts have cast doubt on the Home Office's ability to manage such a massive computer project after a string of recent disastrous schemes.
The move is also likely to face opposition from some cabinet members and civil liberties groups who are opposed to an ID card scheme.
The cost of a passport and driving licence is set to almost double under the proposals, as the government demands extra identity details, such as fingerprints or iris recognition, as the first stage towards bringing in a national ID card scheme.
Blunkett told MPs yesterday that in future every time people renew their passport or driving licence their "biometric" details would be logged on a national computerised data base whether they wanted it or not.
In his Commons statement at Westminster, Blunkett said that European Union countries and the US were moving towards "biometric" passports.
He said that over the next two to three years the Home Office and the passport agency would build a system where all renewed passports would include basic personal information, a digital photo and at least two "biometric" identifiers such as facial recognition, iris scans or fingerprints.