Three million Britons have been issued with the new hi-tech passport, designed to frustrate terrorists and fraudsters. So why did Steve Boggan and a friendly computer expert find it so easy to break the security codes?

Six months ago, with the help of a rather scary computer expert, I deconstructed the life of an airline passenger simply by using information garnered from a boarding-pass stub he had thrown into a dustbin on the Heathrow Express. By using his British Airways frequent-flyer number and buying a ticket in his name on the airline's website, we were able to access his personal data, passport number, date of birth and nationality. Based on this information, using publicly available databases, we found out where he lived, his profession, all his academic qualifications and even how much his house was worth.

It would have been only a short hop to stealing his identity, committing fraud in his name and generally ruining his life.

Great news then, we thought, that the UK had just begun to issue new, ultra-secure passports, incorporating tiny microchips to store the holder's details and a digital description of their physical features (known in the jargon as biometrics). These, the argument went, would make identity theft much more difficult and pave the way for the government's proposed ID cards in 2008 or 2009.

Today, some three million such passports have been issued, and they don't look so secure. I am sitting with my scary computer man and we have just sucked out all the supposedly secure data and biometric information from three new passports and displayed it all on a laptop computer.

The UK Identity and Passport Service website says the new documents are protected by "an advanced digital encryption technique". So how come we have the information? What could criminals or terrorists do with it? And what could it mean for the passports and the ID cards that are meant to follow?

First it is necessary to explain why the new passports were introduced, and how they work.After the 9/11 attack on the World Trade Centre, in which fake passports were used, the US decided it wanted foreign citizens who presented themselves at its borders to have more secure "machine-readable" identity documents. It told 27 countries that participated in a visa waiver programme that citizens with passports issued after the 26th of last month must have micro-chipped biometric passports or would have to apply for a US visa. Among those 27 countries are the major EU members, and other friendly nations ranging from Andorra and Iceland to Singapore, Japan and Brunei. The UK, of course, is also included.

Standards for the new passports were set by the International Civil Aviation Organisation (ICAO) in 2003 and adopted by the waiver countries and the US. The ICAO recommended that passports should contain facial biometrics, though countries could introduce fingerprints at a later date. All these would be stored on a Radio Frequency Identification (RFID) microchip, which can be accessed from a short distance using radio waves. Similar chips are commonly found in retail, where they are used for stock control.

Fatally, however, the ICAO suggested that the key needed to access the data on the chips should be comprised of, in the following order, the passport number, the holder's date of birth and the passport expiry date, all of which are contained on the printed page of the passport on a "machine readable zone." When an immigration official swipes the passport through a reader, this feeds in the key, which allows a microchip reader to communicate with the RFID chip. The data this contains, including the holder's picture, is then displayed on the official's screen. The assumption at this stage is that this document is as authentic as it is super-secure. And, as we shall see later, this could be highly significant.

Once the passports began to be issued in the UK in March, we began laying the foundations for examining them. Phil Booth, national coordinator of the campaign group NO2ID, suggested to his members that they apply for a new passport. Anyone who gets one before ID cards are rolled out will not have to register for a card until their passports expire in 10 years' time, and this appealed to Booth.

At the same time, Adam Laurie, my computer expert and technical director of the Bunker Secure Hosting, a Kent-based computer security company, and I began laying plans to examine the new passports. Laurie is actually not a scary individual - he is regarded in the industry as a technical wizard who cares about privacy and civil rights - but much of the electronic information he uncovers is. Two years ago, he revealed that Bluetooth mobile phones could be accessed remotely, drained of their contact details, diary entries and pictures, and manipulated to act as bugging devices. The cellphone industry spent millions of pounds plugging the gaps he exposed.

By last month, Booth, Laurie and I each had access to a new biometric chipped passport and were ready to begin testing them. Laurie's first port of call was the ICAO's website, where the organisation had published specifications for the new travel documents. This is where he learned that the key to opening up the secure chip was contained in the passports themselves - passport number, date of birth and expiry date.

"I was amazed that they made it so easy," Laurie says. "The information contained in the chip is not encrypted, but to access it you have to start up an encrypted conversation between the reader and the RFID chip in the passport.

"The reader - I bought one for £250 - has to say hello to the chip and tell it that it is authorised to make contact. The key to that is in the date of birth, etc. Once they communicate, the conversation is encrypted, but I wrote some software in about 48 hours that made sense of it.

"The Home Office has adopted a very high encryption technology called 3DES - that is, to a military-level data-encryption standard times three. So they are using strong cryptography to prevent conversations between the passport and the reader being eavesdropped, but they are then breaking one of the fundamental principles of encryption by using non-secret information actually published in the passport to create a 'secret key'. That is the equivalent of installing a solid steel front door to your house and then putting the key under the mat."

Within minutes of applying the three passports to the reader, the information from all of them has been copied and the holders' images appear on the screen of Laurie's laptop. The passports belong to Booth, and to Laurie's son, Max, and my partner, who have all given their permission.

Booth is staggered. He has undercut Laurie by finding an RFID reader for £174, which also works. "This is simply not supposed to happen," Booth says. "This could provide a bonanza for counterfeiters because drawing the information from the chip, complete with the digital signature it contains, could result in a passport being passed off as the real article. You could make a perfect clone of the passport."

But could you - and what use would my passport be to you? A security feature of the chip ensures that information cannot be added or altered, so you couldn't put your picture on my chip. So is our attack really so impressive?

The Home Office thinks not. It correctly points out that the information sucked out of the chip is only the same as that which appears on the page, readable with the human eye. And to obtain the key in the first place, you would need to have access to the passport to read (with the naked eye) its number, expiry date and the date of birth of its holder.

"This doesn't matter," says a Home Office spokesman. "By the time you have accessed the information on the chip, you have already seen it on the passport. What use would my biometric image be to you? And even if you had the information, you would still have to counterfeit the new passport - and it has lots of new security features. If you were a criminal, you might as well just steal a passport."

However, some computer experts believe the Home Office is being dangerously naive. Several months ago, Lukas Grunwald, founder of DN-Systems Enterprise Solutions in Germany, conducted a similar attack to ours on a German biometric passport and succeeded in cloning its RFID chip. He believes unscrupulous criminals or terrorists would find this technology very useful.

"If you can read the chip, then you can clone it," he says. "You could use this to clone a passport that would exploit the system to illegally enter another country." (We did not clone any of our passport chips on the assumption that to do so would be illegal.)

Grunwald adds: "The problems could get worse when they put fingerprint biometrics on to the passports. There are established ways of making forged fingerprints. In the future, the authorities would like to have automated border controls, and such forged fingerprints [stuck on to fingers] would probably fool them."

But what about facial recognition systems (your biometric passport contains precise measurements of key points on your face and head)? "Yes," says Grunwald, "but they are not yet in operation at airports and the technology throws up between 20 and 25% false negatives or false positives. It isn't reliable."

Neither is the human eye, according to research conducted by a team of psychologists from the University of Westminster in 1996. Remember, information - such as a new picture - cannot be added to a cloned chip, so anyone using it to make a counterfeit passport would have to use one that bore a reasonable resemblance to themselves.

But during Westminster University's study, which examined whether putting people's images on credit cards might reduce fraud, supermarket staff drafted in for tests had great difficulty matching faces to pictures. The conclusion was that pictures would not improve security and they were never introduced on credit cards. This means that each time you hand over your passport at, say, a hotel reception or car-rental office abroad to be "photocopied", it could be cloned with equipment like ours. This could have been done with an old passport, but since the new biometric passports are supposed to be secure they are more likely to be accepted without question at borders.

Given the results of the Westminster study, if a terrorist bore a slight resemblance to you - and grew a beard, perhaps - he would have a good chance of getting through a border. Because his chip is cloned, with the necessary digital signatures, and because you have not reported your passport stolen - you still have it! - his machine-readable travel document will get him wherever he wants to go, using your identity.

What about the technical difficulties? The government claims the new biometric passport chips can be read over a distance of just 2cm, but researchers all over the world claim to have read them from further. The physics governing those in British passports says they could be read over a metre, but no one has yet done that. A Dutch team claims to have contacted chips at 30cm.

Laurie has, however, rigged up a piece of equipment that can connect to a passport over 7.5cm. That isn't as far as the Dutch 30cm, but it is enough if your target subject is sitting next to you on the London Underground or crushed up against you on the Gatwick Airport monorail, his pocketed passport next to the reader you have hidden in a bag.

It takes around four seconds to suck out the information with a reader; then it can be relayed and unscrambled by an accomplice with a laptop up to 1km away. With a Heath Robinson device we built on Tuesday using a Bluetooth antenna connected to an RFID reader, Laurie relayed details of his son's passport over a distance of 10 metres and through two walls to a laptop.

Ah, the Home Office will say, but you still need to see the information in the passport that will form the key needed for connection. Well, not necessarily. Consider this scenario: A postman involved with organised crime knows he has a passport to deliver to your home. He already knows your name and address from the envelope. He can get your date of birth by several means, including credit-reference agencies or from the register of births, marriages and deaths (and, let's face it, he delivers all your birthday cards anyway).

He knows the expiry date - 10 years from yesterday, give or take a day, when the passport was mailed to you. That leaves the nine-digit passport number. NO2ID says reports from its 30,000 members up and down the country are throwing up a number of similarities in the first four digits of the passport number, so that reduces the number of permutations, potentially leaving five purely random numbers to establish.

"If the rogue postman were to take your passport home, without opening the envelope he could put it against a reader and begin a 'brute force' attack in which your computer tries 12 different permutations every second until it has the right access codes," says Laurie. "A five-digit number would take 23 hours to crack at the most. Once all those numbers were established, you could communicate with the RFID chip and steal all the information. And your passport could be delivered to you, unopened and just a day late."

But is this really credible? Would criminals or terrorists really go to such lengths? Ross Anderson, professor of security engineering at the University of Cambridge computer laboratory, believes they would. "The point is that once you have extracted the data from the chip you can have a forged passport that contains not just forged physical stuff," he says. "You also have the digital bit-stream so the digital signature of the passport checks out. That makes it possible to travel through borders with it.

"What concerns me is that this demonstrates bad design on the part of the Home Office, and we know that government IT projects have a habit of going terribly wrong. There is a lack of security in what we can see - so what about the 90% of the iceberg in the system that we can't see?

"There isn't even a defence against the brute-force attack. In much the same way as you are only allowed three attempts to feed in your PIN number at an ATM, the passport chip could have been made to stop allowing repeated incorrect attempts to contact it. As things stand, a computer can keep trying until it gets the numbers right. To say this doesn't matter displays a cavalier lack of concern."

The problems we have identified with RFID chips in passports raise all sorts of questions about the UK's proposed ID card scheme, which will use the same technology. The government has not said exactly what will be contained in the ID card's chip, but there will be a National Identity Register that could contain around 50 pieces of information about you, ranging from your name, age, and all your addresses, to your national insurance number and biometric details. Eventually, you may need one to access healthcare. It could even replace the passport.

Already, then, criminals and terrorists will have identified just how useful cloned ID cards might be. It would be folly to think their best minds are not on the case.

The Home Office insists that UK passports are secure and among the best in the world, but not everyone agrees. Last week, an EU-funded body entitled the Future of Identity in the Information Society (Fidis) issued a declaration on machine-readable travel documents such as RFID-chipped passports and ID cards. It said the technology was "poorly conceived" and added: "European governments have effectively forced citizens to adopt new ... documents which dramatically decrease their security and privacy and increase risk of identity theft."

The government is now facing demands from the Liberal Democrats and anti-ID card groups for a recall of the passports so that simple devices such as foil covers can be installed - at enormous cost. Such covers would at least stop chips being scanned remotely, though they wouldn't prevent an unscrupulous hotel receptionist from opening the passport and sucking out its contents the way we did.

It may be that at some point in the future the government will accept that putting RFID chips in to passports is ill-conceived and unnecessary. Until then, the only people likely to embrace this kind of technology are those with mischief in mind.