Home Secretary David Blunkett is refusing to publish full details of finances behind the controversial national identity scheme, despite recommendations today from an influential committee of MPs.
The Commons' Home Affairs Select Committee expressed serious reservations about Mr Blunkett's plan and said that Home Office secrecy over the scheme could lead to spiralling costs.
Although the committee gave its broad backing to the scheme, it criticised the Home Office for a "lack of clarity and definition on key elements of the scheme and its future operation".
Core aspects of the proposals had been "poorly thought out", the MPs said.
And secrecy over the procurement process - expected to cost the taxpayer up to £3 billion - was inhibiting proper public discussion, they added.
Mr Blunkett immediately rejected calls to publish full costings of the scheme, citing market sensitivity.
The 100-page report said the cards might actually make it easier to carry out identity fraud if they were not properly checked.
Members also revealed that they were "extremely concerned" about plans to give MI5 and MI6 "nearly unfettered access" to the database designed to hold details of every British citizen.
"The Bill should contain an explicit reaffirmation of the right of individuals to see both the data held on them and the audit trail of who has accessed those data and on what occasions, subject only to national security and crime exemptions," the report said.
"The introduction of identity cards carries clear risks, both for individuals and for the successful implementation of the scheme.
"We are concerned by the lack of clarity and definition on key elements of the scheme and its future operation and by the lack of openness in the procurement process."
The identity card proposed by Mr Blunkett will feature a microchip bearing so-called "biometric" information such as fingerprints or an iris scan.
All data will also be stored on a central National Identity Register, so that police and other officials can cross-check information on each card.
Mr Blunkett's claim that the ID cards will aid the fight against terrorism, crime, illegal immigrants and abuse of public services was backed by the committee, by a majority of five members against two.
Committee chairman John Denham MP said: "This ID card scheme should go ahead but the Government must take serious note of the criticism we make of the way the plan is being developed.
"We need more clarity on the way the card and the register will work in practice.
"The Home Office has allowed commercial sensitivities to stand in the way of proper technical and public scrutiny of the practical details of the scheme."
The MPs said the cards would represent a "significant change in the relationship between the state and the individual in this country".
But it should not be rejected on constitutional grounds alone, they added.
Despite the publication of a draft Bill in November it was still unclear how many card-reading devices would be required in public agencies such as hospitals and Jobcentres, and how they would be paid for, the MPs said.
There was also "very little clarity about the level and nature of checks that will be required".
At the very least, ministers should produce "broad estimates" of how many card readers will be required, they said.
The new ID system would only be likely to help in the fight against terrorism if it were to be made compulsory, they went on.
Mr Blunkett plans to begin introducing the cards on a voluntary basis in 2007 with a decision on whether to make them compulsory around five years after that.
MPs insisted that there should be better safeguards to stop the identity database being used for other purposes - so-called "function creep".
There should be "exhaustive" testing of biometrics to ensure reliability, the report went on.
Mr Blunkett said he was pleased to secure the committee's broad backing and guaranteed there would be proper safeguards against function creep.
But he added: "I do not accept that it is appropriate to release detailed, market-sensitive information about the financial and contractual aspects of the scheme at this stage.
"I understand the desire for more information, but we need to balance this with our duty to ensure we get the best value for money for the taxpayer.
"We will consider fully the committee's many comments and suggestions as we progress with our consultation."
Shadow home secretary David Davis commented: "It is extremely disturbing that decisions on ID cards are being taken in secret.
"ID cards raise complex questions of civil liberties so of all of the policy decisions taken in secret, ID cards shouldn't be one of them.
"Any decision to proceed should be based on consensus and after open debate."
Liberal Democrat home affairs spokesman Mark Oaten said: "The £3 billion cost of ID cards would be better spent on getting more police on to our streets and ensuring that the intelligence services are properly resourced to tackle terrorism."
Director of civil rights group Liberty, Shami Chakrabarti, said: "It is no surprise that the committee's searching inquiry has produced such a critical report.
"Our experience is that the more closely people study Mr Blunkett's grand plan the less credible and attractive they find it."
Mr Denham said today: "The majority of the committee believe that we should have an ID card and that it would make a real contribution to tackling terrorism, serious crime, illegal immigration and so on.
"But yes, we have concerns about the way the scheme is being developed at the moment.
"There are too many unanswered questions at the moment," he said on the BBC Radio 4 Today programme.
"Without answers to those questions we have got two concerns: one is that the project may not work in the way intended, and secondly it is going to be difficult to know what it is going to feel like as a citizen if you carry an ID card.
"What we are most worried about is if key decisions about the design of the scheme get taken as part of the procurement process, get taken by the private companies which the Government works with, rather than being open decisions which can be properly scrutinised by technical experts."
Information Commissioner Richard Thomas said: "The concern is not so much about the identity cards, it is the national database which will lie behind the card. It takes three pages of the draft Bill to outline all the information to be held on each individual.
"And then there are the people who have access to the information. The police, the security services, yes maybe. But also the Inland Revenue, Customs and Excise, any Government department nominated by the Secretary of State.
"Worse still, we as individuals can't see our own information - the Bill takes away this right. This must be wrong, this must be quite unacceptable," he told the programme.
"We fear the balance isn't right with this particular set of proposals. There are so many unanswered questions, there are so many safeguards which we think are needed, which we are pressing for as and when the scheme comes into force.
"And we are concerned about function creep - the risk that the clear objectives are not set out sufficiently clearly on the face of the Bill. And yet secondary legislation, no further Act of Parliament, could be used to extend the way in which the scheme operates."Reuse content