People applying for passports from 2008 will have to pay for an identity card whether they want one or not, Home Secretary Charles Clarke has said.
ID cards may become compulsory
A compromise won by the Lords means passport applicants will be able to opt out of getting an ID card until 2010.
But those opting out will get no discount - something the Tories say will make people resentful.
Mr Clarke also announced that ID cards would be made compulsory if Labour wins the next election.
'Foolish to opt out'
Prices have yet to be set for a combined passport and identity card - although the government says it will cost £93 to make.
Before 2010, passport applicants will be able to choose not to have the cards but their details will be put on a national identity database.
Mr Clarke told reporters the opt-out had been introduced to allay fears expressed in the House of Lords that cards would be "foisted" on people.
But he said: "I don't think there is any benefit in opting out at all. Anyone who opts out in my opinion is foolish."
Separate laws will need to be passed to make the cards compulsory, although ministers say they will not force people to carry the cards.
Mr Clarke did not name a date for making them compulsory, saying it would depend on the rate passports were renewed.
But he did not think the opposition would be able to stop the scheme because by 2010 a "large number of people... should either have cards or hope to have cards".
"I would be very surprised if the next Conservative manifesto said 'stop the scheme'. It would be very difficult to do," he said.
Tory shadow home secretary David Davis said: "When people are told they will have to pay for an ID card whether or not they opt to have one, this will make them even more resentful of this system.
"Under a Conservative government, the scheme would be scrapped and the savings put to other uses - including strengthening our security."
The Lib Dems accused the Conservatives of being duped by Labour into backing the opt-out plan in a crunch Commons vote on Wednesday.
Home affairs spokesman Nick Clegg said: "Within hours of parading their so-called compromise the Home Office is already making it clear that it was little more than a tactical manoeuvre to ram this legislation through Parliament without any substantive change to the draconian reach and financial costs of the ID database.
"It begs the question whether the Conservatives really knew what they were doing when they fell into line with Charles Clarke's ruse."
Mr Clarke said he believed there was an "appetite" among the public for ID cards, which he said would bring "massive benefits" for banks, law enforcement agencies and "the individual citizen".
And the "potential benefits to the private sector" of ID cards added up to £425m a year, said Mr Clarke.
People applying for passports will have to visit their local passport office where they will be interviewed, fingerprinted and have "background checks" carried out on them.
About 80% of the UK population has a passport.
All will have to be renewed within the next 10 years, at an initial rate of about 7 million people a year, says the Home Office.