Gordon Brown has left open the option of scrapping the identity card scheme if he becomes Prime Minister.

The Chancellor has refused to approve the multimillion-pound budget for the whole scheme and has given the Home Office permission to spend only a set amount of money towards developing it, it was disclosed yesterday. The overall cost, set at £5.4 billion by the Home Office, will exceed the spending limit set by the Treasury.

Before John Reid, the Home Secretary, can press ahead with issuing millions of the cards, he will have to seek further permission from the Treasury. Mr Brown’s decision to keep his options open by refusing to authorise payment for the total cost was revealed in a written parliamentary answer to Mark Francois, a Tory backbencher.

Stephen Timms, Chief Secretary to the Treasury, said that the Home Office had been authorised to “commit resources up to certain defined limits”, which would be exceeded by the total cost of the scheme. He said that completing the scheme would require Treasury approval, adding: “Approval will be sought at an appropriate stage in the project planning process.”

By last summer the Home Office had spent £46 million on preparing for the scheme.

David Davis, the Shadow Home Secretary, said yesterday: “This is a stunning admission that Gordon Brown has not yet backed the ID card project. It is hard to know what the Treasury thinks is an ‘appropriate stage’ in the planning process since millions of pounds has been spent and is continuing to be spent on this ill-designed and poorly planned multibillion-pound waste of money.

“This suggests that the Home Office has not submitted a robust costing plan, casting real doubts on their claim that this system would cost less than the £20 billion that independent experts estimate.”

The Government plans to start issuing biometric resident permits to foreign citizens next year and to start issuing identity cards to Britons in 2009.

A Home Office spokesman said: “The Home Office, like other government departments, are required in certain cases to refer business cases for large projects to the Treasury for approval. There is nothing unusual in this.”

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