Critics of initiative to be unveiled by David Cameron talk of 'Big Brother' system that could identify individuals

Controversial plans to build a massive database that would be capable of storing every British citizen's DNA records will be unveiled this week by the prime minister.

David Cameron will announce a groundbreaking initiative designed to position the UK at the forefront of the genetic revolution – a potentially multibillion-pound industry that is attracting attention from major technology companies, including Google.

The plan has been drawn up by the Human Genomics Strategy Group, run by Professor Sir John Bell, an adviser to the Department for Business, Innovation and Skills, with support from the Wellcome Trust, the country's largest charity.

Last week Cameron's senior policy advisor, Rohan Silva, said that the NHS's patient records were a "valuable asset" and predicted that sharing them in a safe, secure and anonymous way with researchers would allow the UK to be at the forefront of the next generation of health technologies.

"The UK has developed a life sciences strategy that is based around using the collection of NHS data … as a catalyst for life sciences innovation and growth," Silva explained in an interview. He also said that the government has learned from previous large-scale technology projects that failed.

Both the Tories and the Liberal Democrats opposed plans for a DNA database put forward under Labour, partly due to concerns that it could affect people's civil liberties.

But the coalition is expected to allow people who do not want their data stored to "opt out" – which will go some way to alleviating concerns from human rights groups.

However, there are worries about how the data will be used and shared with third parties, including commercial organisations.

The campaign group Genewatch, which is critical of the plan, claims anyone with access to the database could track an individual using their DNA and then identify their relatives.

It warns anyone with access to the data would be able to work out the identity of individuals even if they are not given names and addresses.

"Plans to build a DNA database of everybody in the NHS are a massive waste of public money and a gravy train for IT and gene sequencing companies and private healthcare," said Genewatch's director, Dr Helen Wallace. This Big Brother project will allow every individual and their relatives to be identified and tracked and makes the scrapped plans for ID cards look like small government."

Other experts have expressed doubts about some of the claims being made for genomics. The IVF pioneer, Professor Lord Robert Winston, told a literary festival over the summer that the hype around the human genome was "complete balls".

Dr Stuart Hogarth, of the department of social science, health and medicine at King's College London, pointed out that the UK already had a DNA database, the UK biobank, which has more than half a million records.

He added that the government did not have a good track record when it came to running major NHS IT projects. The £15bn patient record database was scrapped last year and many projects have come in over budget. "The reality is that much of the data won't be useful," Hogarth said.

"Before we start using genetic data in clinical practice we need to demonstrate that it's going to improve clinical outcomes."