The Passport Service has begun a huge IT investment programme, worth 20m a year over the next three years.
A series of major projects will pave the way for the introduction of biometric passports and ID cards, computerised background checks on passport applicants, and sophisticated anti-terrorism checks.
The work represents a significant change in priorities for the agency, which has been focusing on improving its customer service, said its chief executive, Bernard Herdan.
"We are being asked by government to toughen up the identity-authentication process and deal with the serious issue of fraud," he said.
Herdan's priority is to ensure that the IT systems are in place to issue the public with biometric passports from January next year.
The new-style passports will record a full-sized digital image of the passport holder. The chip will be protected with a digital signature that will certify the passport as genuine and ensure that images cannot be changed or tampered with. An inbuilt antenna will allow the passport to be read from a distance.
"The chip will make the document much more resilient and make it much more difficult to change details - be it data or a photograph. It will also potentially enable border posts to use facial-recognition technology," said Herdan.
The agency is investing 60m in production lines in Japan to produce the biometric passports. The work will also mean upgrades to the Passport Service's Passport Application Support System (PASS), which is managed by Siemens Business Services under a 10-year PFI contract.
Regional offices, the Foreign Office, and overseas embassies and high commissions will be issued with equipment to add biometrics to the passports.
Herdan plans to roll out automated background checks for new passport applicants in parallel with the introduction of biometric passports. The service is working with the credit reference agency, Experian, on developing the system. Dubbed the Personal Identity Project (PIP), it will allow passport officials to check the "identity footprint" of passport applicants by comparing the details they give on application forms with details held on public and private sector databases.
The Identity Card Bill contains legislation that will enable further background checks against government databases held by the Office of National Statistics, the Driving Vehicle Licence Authority, the Department of Work and Pensions, and the Immigration and Nationality Directorate.
"It will be used to make it more difficult for people to hijack identity. It is about 'social footprint' checking. We are checking that someone who says they live in the UK has an identity," said Herdan.
The Passport Service plans to phase the checks in from autumn this year, following a two-year trial in Glasgow. The challenge, he said, is to develop a "decision engine" that gives a fast response time while not giving spurious red warning signals with genuine applicants.
PIP will work in tandem with another database, Omnibase, which will allow the Passport Service to share passport data with other government departments. They will be able to check the authenticity of passports during fraud or criminal investigations. Terminals at airports will allow passports to be checked against lists of lost and stolen passports.
These background checks will be accompanied by a new system of interviews for first-time passport applicants from October 2006. The interviews are designed both to deter and detect fraudulent passport applications.
The Passport Service estimates that 0.18% of all passport applications are fraudulent - equivalent to 10,000 cases a year. Most of these, about 75%, are from first-time applicants. "That's intolerable. It can't go on," said Herdan.
"We will ask them reasonable questions about themselves. If they fail to answer them, or they can't speak English, or they can't come because they are not in the country - this is intended to both deter and to uncover people who come to us with a story that does not stack up."
The service is tendering for a network of 69 interview offices across the UK. The offices will be linked electronically to the Passports Service's main computer system, PASS, to provide a paperless service. Siemens has been contracted to modify PASS, to link the new offices and to integrate the background checking system. Atos Origin will provide the desktop infrastructure.
"There is a fantastic amount to do," said Herdan. "We are tendering at the moment for the physical office infrastructure for the offices and the telecoms network. We are also out to recruit staff."
Biometric fingerprints will be added to passports from 2008. Similar biometric passports will be rolled out across the European Union as part of a Europe-wide agreement, for which the UK claims credit.
The passports will form the keystone of the Home Office's e-borders project, enabling immigration officials to check the identities of people arriving or leaving the UK, and to record their visits.
Passport applicants will be asked to provide iris and facial scans for biometric ID cards along with the passport biometrics. The data will be held on the central ID population register, along with other basic personal details. Government departments will have access to the register. This will give them the ability to issue documents, such as driving licences, without having to carry out further identity checks or demand further proof of identity, said Herdan.
These developments will mean significant changes to the Passport Service's underlying IT systems. The service refreshed and upgraded its technology last year, but expects to make further significant changes when its contract with Siemens expires in 2008. The service has already increased bandwidth on the networks and added storage.
"We are working on what other changes have to be made to the current system in order to decide what exactly will be the state of the system that we want to be the basis of a tender action," said Herdan.
"The tender will require whoever wins the job to continue running the existing system and then to evolve it. We are not going to have a 'big bang'."