But the proposals prompted a backlash from the Ulster Unionists last night, protesting about an optional alternative for the province which would allow those with strong nationalist views to avoid carrying anything bearing the Union Jack.
In some right-wing quarters, a national identity crisis was whipped up last week over plans for the voluntary ID card, after it had been reported that it would include the 12-star flag of the European Union.
Protest and counter protest forced ministers into a rush re-think of the proposals and a well-placed Whitehall source said last night that the solution, resolved in talks between ministers this week, would "make everyone happy".
But he was clearly not taking into account the high sensitivity of the Ulster Unionists. And they were joined last night by he Scottish Nationalists, who demanded that the cross of St Andrew should be offered instead of the Union flag to the people of Scotland.
Earlier, one source told The Independent, only half in jest: "You can put out all the flags." He was referring to the option to be offered to those who want to combine their European driving licence, which will eventually be compulsory, with their voluntary identity card. The source said the combined card would contain both the European flag, the Union flag and the Royal Crest - because it might also be used as a European travel document.
Those who did not volunteer for the identity card, but needed the driving licence would get a card containing both the UK and EU flags - except in Northern Ireland, where people would be able to retain their paper driving licences if they wished. That was the option which provoked the anger of the Ulster Unionists, who are demanding a meeting with the Prime Minister to discuss the matter.
The third alternative, for those who do not drive, will be an ID card - expected to include the royal crest and the European flag - which might also be used as a European travel document.
It became clear last night that Whitehall expectations of general satisfaction at the compromise were completely wide of the mark.
There was disappointment that the ID cards would attract a charge, expected to be between pounds 10 and pounds 15, which could deter a widespread take-up. The cards themselves have already aroused the hostility not only of civil liberties groups but of Conservative libertarian MPs, who dislike the idea of people being asked to identify themselves on the street.
However, the Prime Minister is firmly behind ID cards and would eventually like them to become compulsory as part of the fight against crime.
The plans were dismissed as a "real dog's breakfast" by Labour spokesman Doug Henderson. Alan Beith, for the Liberal Democrats, said the scheme had descended into farce.