Identity cards will cost the taxpayer £5.4bn over 10 years, according to latest Home Office figures.

The department said costs incurred in setting up the controversial scheme were included in the estimate.

Under the ID card initiative - which the government insists is vital to tackle terrorism, fraud and organised crime - every adult will have to pay for a biometric card which stores fingerprint and iris scan details.

The Home Office stressed the figures were "likely costs" and "estimates".

About 70 per cent of the total would be spent on issuing the new generation of biometric passports - set to be the forerunner of the ID cards - and approximately 15 per cent would go on technology required for the project.

The £5.4bn estimate includes all the set-up costs, as well as operating and maintaining the infrastructure until October 2016.

It also includes £100m of VAT which is unrecoverable to the Identity and Passport Service but retained by the Treasury.

However, the report excluded some set-up costs that were included in a previous report published by the Home Office in May last year, which put the annual total at £584m, or £5.8bn over a decade.

Home Office minister Liam Byrne confirmed that ID cards will be "implemented rapidly", starting with biometric cards for foreign nationals in 2008.

"ID cards will give us a powerful tool to combat identity fraud which underpins organised crime, terrorism and abuse of the immigration system," he said.

"ID cards will also help transform the delivery of public services to the citizen, making interactions swifter, more reliable and more secure and helping to reduce costs by eliminating wasteful duplication of effort."

But shadow home secretary David Davis said the Home Office "has an absolutely appalling record for delivering IT-based projects on time and on budget".

"Independent experts have predicted this plastic poll tax will in fact cost nearly £20bn," he said.

"Some of this money could be spent on a much needed prison building program.

"In any event ID cards will do nothing to increase our security and in fact may make it worse.

"What the government should be doing is answering our calls to establish a UK border police, putting more police on the streets and appointing a dedicated minister to co-ordinate our security efforts."

And Liberal Democrat home affairs spokesman Nick Clegg said it was "difficult to believe anything the government says about the cost of ID cards given that in the past they have either tried to hide the costs or spectacularly underestimated them".

"Identity cards will be expensive and unworkable," he predicted.