PLANS for compulsory national identity cards were put on ice yesterday when the Government delayed a decision on a mandatory scheme until “later this decade”.

Although David Blunkett got the go-ahead for a draft Bill proposing a voluntary scheme in this year’s Queen’s Speech, it will only give the Government powers to build a database using information from passports, driving licences and residents’ permits.

The decision is a blow for both the Home Secretary and Tony Blair. The Prime Minister has invested considerable political capital in the project, saying that Britain has to have compulsory ID cards in the future.

However, after weeks of fierce negotiations, mostly at John Prescott’s Domestic Affairs Committee, the opposition of Cabinet heavyweights led by Jack Straw and Gordon Brown proved too difficult to overcome and a fudge was agreed.

In an unusual step, the Cabinet issued a statement after its weekly meeting yesterday. “In principle Cabinet believes that a national ID card scheme can bring major benefits,” it said. “In practice, given the size and complexity of the scheme a number of issues will need to be resolved over the years ahead.”

The Government would proceed “by incremental steps”. First there would be legislation to set up a scheme, “but we will reserve the final decision on a move to compulsion until later this decade”.

A draft Bill in the Queen’s Speech this month will pave the way for new legislation giving the Government powers to set up a database using the information from new-style passports, residents’ permits and driving licences.

They will carry biometric data using face recognition technology, fingerprints or an image of the eye.

In an attempt to curb illegal immigration and subsidise the cost of the scheme, residents’ permits for foreign nationals will switch to using biometric data as soon as the technology is available, with applicants having to pay the full cost of processing.

New-style passports could be introduced as early as next year, although biometric driving licences are set to take longer.

The Home Office estimates that eventually the “voluntary” database should cover 80 per cent of the population, five to six years after the programme gets under way. In a last-minute compromise to try to reach agreement with the Cabinet, Mr Blunkett suggested that his scheme be phased in, with passports and other official documents acting as a first wave of the programme.

Yesterday he was optimistic about the outcome of the Cabinet’s discussions. Aides described the compromise as “firing the starting pistol” for a full-blown compulsory scheme. “I think the Prime Minister and I have convinced them (the Cabinet) that we will need biometric identifiers, that if we need them we should use them effectively, that that can only be done by phasing this in incrementally, because you couldn’t possibly in anybody’s dreams have 60 million people suddenly brought on to a scheme,” he said.

He will spell out full details of the Cabinet’s decision to Parliament next Tuesday.

Civil rights campaigners welcomed the Government’s announcement.

Shami Chakrabarti, director of the human rights organisation Liberty, congratulated Cabinet opponents of the scheme for delaying a compulsory scheme.

“To delay taking a decision until later in the decade, when the composition of the Cabinet will almost certainly be markedly different, is clearly a face-saving formula to disguise the fact that Mr Blunkett has lost the argument,” he said.

Oliver Letwin, the Shadow Home Secretary, said: “David Blunkett must be feeling extremely uncomfortable. His enthusiasm for initiatives has come face to face with the realities of practical and political life.”

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