The government is set to fast-track data sharing policies in order to allow public sector bodies to much more easily share people's confidential information, under a major plan reportedly being announced next month.
The news, reported in the Guardian newspaper, comes as a former GCHQ spy chief said that Whitehall's web snooping plans needed to be clarified in order to control the close tracking of citizens' Facebook and Twitter acitivity.
The data sharing plans have provoked anger from privacy campaigners. Guy Herbert, of No2ID, said: "Broad data sharing isn't just inimical to privacy, it's inimical to the rule of law. It necessarily means scrapping both confidentiality and ultra vires."
Next month, Cabinet Office minister Francis Maude is reportedly set to announce the proposals, which are expected to include fast-tracked data sharing between government bodies. One of the first elements may be the sharing of benefits claimants' data, in order to verify their identities and work status.
Such a step could raise concerns over existing data protection measures, especially given the current government's election pledge of eliminating what it called "excessive" databases. In 2009, the previous government was forced to abandon similar steps, the newspaper noted.
The move is expected to be surrounded by promises of "open data", in which organisations and businesses will be encouraged to share more information.
Maude has insisted that the government can facilitate data sharing without building huge databases, because of IT developments in recent years.
A spokesperson at the Cabinet Office told the newspaper: "This is emphatically not an ID card scheme or a national identity database. We want to enable people to prove their identity - if they choose to - without the need for a national scheme. This way the citizen remains in charge, not the state."
As the government grapples with its future data policies, former GCHQ chief Sir David Omand said Westminster needed to catch up with the web. He said the security services and police were off the pace when it came to intercepting Facebook and Twitter.
Nevertheless, Omand issued a robust warning to authorities planning to monitor social networks, and said the government needed to clarify the legal framework in order to protect citizens' privacy.
"Without an explicitly articulated approach towards generating [social media intelligence] based on respect for human rights and the associated principles of accountability, proportionality and necessity," he said, "there is a serious risk that this vital confidence and trust will be undermined."