Experts from the identification cards industry will tell parliament what type of cards they think should be introduced to the UK.
The government wants ID cards to become compulsory
Home Secretary David Blunkett has said that a draft bill on the issue will be published by next month.
Companies who make ID cards will give their opinions to the Home Affairs select committee on whether there should be basic or sophisticated types.
The government has said that they see ID cards as a weapon against terrorism.
Edentity, Cubic Transportation Systems, Lasercard and QinetiQ develop and research smart and biometric cards, which can hold unique physiological or behavioural characteristics such as iris patterns or fingerprints.
ID CARDS KEY FACTS
From 2007-2008 new passports and driving licences will include biometric data
By 2013 it is estimated 80% of adults will have biometric passports or driving licences
4.6m foreign nationals living in UK among first to register on database from 2007-2008.
Introduction of separate ID cards from 2007/8
Costs of setting up the system over next three years £186m
The total cost will be £3bn
From 2007-08 all new passports and driving licences will include biometric data.
The committee will be investigating what is required and which type of card would work for the UK, but they are unlikely to make a recommendation to the government.
The Home Office has said that on each card, costing around £3.50, will be basic details such as name, age, validity dates, nationality, whether a person has a right to work, and a unique number.
But they also said that a secure encrypted chip will contain a unique personal biometric identifier, and cards will be linked to a national secure database to prevent multiple card applications as well as the theft of people's identities by suspected terrorists.
QinetiQ director of security solutions, Neil Fisher, told the committee on Tuesday: "We automatically assume that the so-called smart chips, which are relatively expensive, will be used in identity authentication devices such as ID cards.
"But by using current technologies like 2D barcodes or memory sticks, which cost from fractions of a penny to less than £1 to produce, it is possible to develop low cost data storage devices without compromising on security."
Last November Mr Blunkett said that he wanted ID cards to be compulsory from 2013, and at the very least nobody should be able to work or claim benefits without one.
Belgium, France, Germany, the Netherlands and Portugal all have ID cards.
Mr Blunkett aims to create a national database by 2007-08 containing biometric information, but carrying the cards would only become compulsory after 80% of the population has got one.
A six-month technology trial for the cards began in January, involving 10,000 volunteers having their fingerprints or iris scans put on cards.
Although UK citizens would not have to carry it in the street, the home secretary has said they would have to produce it when required by competent authorities.
There were some worries expressed over costs, with Tory Baroness Knight of Collingtree challenging reports that people will have to pay £70 for the proposed cards.
At House of Lords questions, she asked whether those unable to pay would be imprisoned or whether some arrangement would be made to allow payment.
Home Office Minister Baroness Scotland of Asthal said the charge had not yet been decided as the details of the scheme were still to be ironed out.
"At that stage we will be more able to know precisely how much these cards are likely to cost," she said.
"We have made clear that provision will be made for those who are more disadvantaged financially."
Meanwhile, Shadow Chancellor Oliver Letwin said the plans to introduce ID cards could affect civil rights and its benefits were still questionable.
"I really worry about whether we are embarking on a course of action that will be expensive and complicated and has civil liberties implications and will ultimately be unproductive," he said.