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"I think there is a real issue of civil liberties. All the evidence suggests that governments simply aren't very good at very big high-tech endeavours of this kind," she said.
Mark Littlewood of the civil rights group Liberty said: "We need to guard against ID cards being introduced by stealth. Whilst we warmly welcome the cabinet's decision to put off a decision on making the cards compulsory, a muddled compromise is no way to proceed."
The chancellor's insistence that the scheme could only go ahead if it was self-financing means that the combined passport/ID card which will come in from 2007 is likely to cost £77, with a plain ID card costing £35. Every 16-year-old will be given their card free on reaching that age, but will have to renew it every 10 years.
The results of the Home Office consultation published yesterday claimed 61% public support for the idea, with many people feeling it would "mark a return to more secure times". But the results also showed that while the police think the cards would be valuable in combatting identity and credit fraud, they believe the scheme will only have limited value in tackling illegal immigration and other forms of crime.