The controversial and unpopular ID card scheme, due to be implimented by 2012, might never see the light of day according to the Shadow Home Secretary, Chris Grayling.
Mr Grayling has contacted five companies chosen to bid for Identity Cards contracts warning them to not sign any further contracts with the government as he fears the possibility of “quite big penalty costs” being written in to prevent the cancellation of the scheme, which leaves a “substantial bill” for the taxpayer.
The Tory party have promised to scrap ID cards if elected in the next general election.
Mr Grayling said: “We intend to scrap the ID Card project as one of our first acts if we are successful at the election.
“I am increasingly concerned that the Government is putting in place contractual arrangements that are designed to tie the hands of a future Government, and I want to make the contractors absolutely aware that we do not intend to complete this work.”
He also added: “I want companies to be cautious and recognise that if they invest large amounts of money preparing for this business, it may not happen.”
ID cards, biometric passports and the national identity register is expected to cost more than £5 billion. Ministers estimate that scrapping the cards would cost £40 million.
The government insists the project is still on track.
A Home Office spokesman said: “It is a decision for the government of the day to determine whether to invoke such clauses but equally it would be wholly inappropriate to do so on the basis of opposition policy.
“The Home Secretary has made clear the Government remains fully committed to bringing forward measures to protect people’s identity that have widespread public support.”
The project has attracted attention from human rights campaigners who have organised nationwide protests since the idea was introduced several years ago.