However, the influential Home Affairs select committee ruled out any move to introduce a compulsory national ID card.
At the launch of the committee's report, MPs said they were influenced by arguments submitted by the police, who did not want the card to be compulsory because it might alienate them from the public.
The committee favoured a card that could be used as a proof of identity, combined with a driving licence and passport for use in Europe.
MPs said the benefits and convenience of the card would encourage people to participate in the scheme. Photocard driving licences are due to be introduced next year.
The committee's chairman, Sir Ivan Lawrence, said: "If 35 million people have a driving licence, then a significant pro- portion of those will want to have a licence plus identity card for the advantages it will bring them."