Every Briton is to be offered a government-backed virtual ID to store personal data online, file tax returns and apply for driving licences through a single portal.

Within a year, more than half a million people are expected to start using the new “Verify” scheme to prove their identity, under a radical expansion of public services available online. The move has prompted privacy concerns.

Government aides insist that, far from bringing in identity cards by the back door, the new voluntary scheme makes any attempt to reintroduce a compulsory document much less likely. “This removes once and for all the need for an identity card because it will be possible to prove your identity securely without one,” a source said.

Under the Verify programme, people