The business school has developed an alternative model for a national ID card scheme, based on smartcards loaded with a unique digital certificate for each member of the population. It said this would be cheaper, less risky, and more secure than the government's existing scheme.
The London School of Economics estimates that the true cost of the government's current biometric ID card proposals are likely to reach between 12bn and 18bn, once the cost of issuing sophisticated biometric readers is taken into account. This figure is more than double the Home Office's 5.8bn estimate.
The London School of Economics' report, which went out to consultation last week, is based on feedback from working groups, academic experts and businesses, including the CBI, the British Computer Society and IT suppliers.
It calls for the government to adopt a decentralised model for checking the identities of the population. This model is favoured by other European countries that have introduced electronic identity cards, including Germany and Italy.
The plan would eliminate the need for a central biometric database, which the London School of Economics said would be expensive to develop and maintain, difficult to secure, and would introduce a single point of failure into the system.
"Our system achieves practically all the policy goals that the government has set out. We are proposing a more proportionate, less intrusive system," said Gus Hosein, visiting professor in the London School of Economics' department of information systems.
Under the proposals, each government department would verify the identity of members of the public by matching their digital certificate against its own local database.
Rather than having a single unique number to identify each person, each department would have a different reference number for each individual, making the system more secure against identity theft. Biometric identify verification could be built into the smartcard if needed.
The complexity of the government's proposals makes them very high-risk, said Hosein. He accused the government of using commercial confidentiality as an excuse for refusing to disclose the full costs of the scheme.
"Every government department and every police official would require a biometric reader under the government model. We are not just talking about a cheap reader. We are talking about a reader that can match your iris scan and your fingerprint to one of 50 million people," he said.
The London School of Economics is expected to publish its full report on the government's ID card programme later this month.