Plans to introduce ID cards have been backed by business leaders, even though they have concerns about the details.
Some MPs have also sad the plans are badly thought out
The Confederation of British Industry (CBI) says the cards could help in combating fraud.
But it has also criticised the draft proposals as not robust enough, leaving companies to "carry the can" if information on cards is wrong.
ID cards carrying biometric data, such as fingerprints and iris scans, will appear in 2007.
The Home Office wants them made compulsory by 2013.
The CBI said an identity card scheme could bring social and economic benefits for business and individuals, but only if the government got its proposals right.
CBI deputy director-general John Cridland said it shared government concern that having no way to prove identity made the UK more vulnerable to criminals and terrorists.
He said: "ID cards could improve security and make access to public services more efficient.
"Companies want ID cards to be a universal identity-authentication system.
"But they are concerned the government has not appreciated the dangers of driving through a vague and insufficiently thought-out plan."
He said employers wanted to be sure they could rely on any information on an ID card.
"The scheme will be fatally undermined if employers do not have that trust," he said.
Firms wanted to know they would not be penalised if they relied on data which turned out to be wrong, the CBI said.