The two biggest contractors on the doomed ID cards scheme will escape any serious financial impact, as the government will not cancel their deals.

With today's announcement that ID cards will be scrapped within 100 days, it's emerged CSC and IBM will simply have the scale of their tasks reduced.

CSC is operating the 10-year, £385m application and enrolment contract. A Home Office spokesman told The Register that because the technology will be used for passports and in issuing ID cards to foreigners - which will go ahead - the firm will not be affected.

Likewise there will be no significant impact on IBM's seven-year, £285m National Biometric Identity Service deal. It will now only need to store biometric data relating to passports and asylum applicants, however.

The only ID card contractor facing the exit is Thales. The Home Office said it is in negotiations to part ways on a relatively meagre £18m deal to build the National Identity Register. A spokesman declined to discuss what settlement the government hoped to achieve.

The government said today the Identity Documents Bill would save the exchequer £86m over four years. News that only a small proportion of that figure will come from breaking contracts means redundancies are on the way at the Identity and Passport Service (IPS), the Home Office Agency responsible for deploying ID cards.

A spokesman declined to discuss the scale of the job losses today, saying talks with permanent staff will begin in the next few weeks.

Already though, 60 temporary workers at the IPS' Durham site have been told they will leave three months early. ®