The British government could soon roll ahead with plans to issue national ID cards after the Houses of Parliament reached a compromise last night on a bill detailing the plan.

The House of Lords voted in favour of an amendment to the bill making receiving the card optional until 1 January 2010. The House of Commons then approved the revised bill. A representative of Tony Blair said the opt-out date "strikes a sensible compromise".

Those who apply for a passport before that date, however, will still be entered in a database called the National Identity Register, part of the ID card system. After the deadline, the card will become mandatory for anyone applying for a designated identity document, such as a passport.

Peers in the House of Lords amended the bill several times amid privacy concerns, resisting the government's desire to make the card mandatory when the programme started.

The bill now moves to royal approval, the last step before becoming law.

The Home Office wants to start issuing ID cards by 2008. While strong opposition surfaced against making the cards mandatory, the government maintains that national ID cards will strengthen national security, reduce benefit fraud and enhance immigration controls.

The UK is gradually implementing new "ePassports" with a chip containing a scan of the holder's unique facial features. It is envisioned that the ID card will also contain biometric details such as fingerprints and iris patterns.

The government has estimated the plan will cost around £584m per year. An ID card valid for 10 years would cost £30 to issue, and a new passport £63. The increased costs come from implementing the National Identity Register and the cost of producing the ID cards, the Home Office has said.

The London School of Economics has contested the estimate, however, saying the programme's costs could be twice the government's figure. The government said it would not release further details of its costs studies so as not to affect a future procurement process.

A Home Office official contacted this morning could not immediately detail the next step in the programme if the bill is approved into law.