MPs gave the Identity Cards Bill a second reading by 314 to 283, after a rebel amendment to block the measure was withdrawn.

It was the first real test of Mr Blair’s reduced 67-strong majority since Labour was returned to power in May.

The Bill is certain to face tough examination in committee, with critics demanding concessions on data privacy and costs.

Home Secretary Charles Clarke went some way to meeting those concerns today offering to cap the cost of ID cards but refusing to set a figure.

Mr Clarke insisted ID cards would act as a “bulwark against the Big Brother society,” providing “real benefits to the individual and society” by limiting the scope for identity theft.

There would be no open access to the information held on individuals and ethnic minorities had no reason to fear the scheme, he said.

Twenty one Labour backbenchers signed the withdrawn amendment to block the Bill’s second reading because it made “no significant contribution to the reduction or eradication of terrorism”.

Labour critic David Winnick (Walsall N) gave the Home Secretary an early taste of the strength of feeling, warning: “If this measure was on a free vote tonight, it would certainly be thrown out.”

The plans have also come under fire from the Information Commissioner Richard Thomas who dubbed them excessive and disproportionate, while a London School of Economics report warned the scheme could eventually cost £20 billion, or £300 per card.

Mr Clarke said Mr Thomas’s analysis was “incorrect,” adding: “I argue the ID card system is a bulwark against the surveillance society, the Big Brother society, and not a further contribution to it.”

Mr Clarke told critics of the cost of the scheme that he would set a cap on it before the Bill left the Commons. “It would be ridiculous to have an expensive card which people were, in some sense, forced to buy. But that is not what we will have,” he said.

Mr Clarke acknowledged there were serious practical concerns over the legislation and offered to look at resolving these in committee.

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