Sensitive personal information would be passed between Whitehall departments under new government plans.
Full details of the government plans will not be known until next April
The move would help to tackle ID fraud and would also identify those "in need", the Department of Constitutional Affairs (DCA) has claimed.
It promised "appropriate safeguards" to ensure some details remained private.
But the Conservatives said the idea was an "excuse for bureaucrats to snoop", while pressure group NO2ID described it as an "abolition of privacy".
Measures in place
Sharing of personal details between different state agencies had already enabled the "early identification" of those at risk of homelessness, the DCA claimed.
It had also helped reduce crime and fraud by identifying "hotspots", and had improved the distribution of Pension Credits, where elderly people may not have realised they were entitled to additional benefits.
The DCA claimed further proposals, to be published in April, would help disadvantaged people - or the "small but significant number of adults who have chaotic lives and multiple needs", as it described them.
It also claimed the plans would help business by removing the need to "repeatedly" give the same information about employees and customers to the same agencies.
But the Conservatives fear increased data-sharing powers would allow the electoral roll to be used to police the ID Card database.
This could turn town halls into "state snoopers" and see residents fined up to £2,500 for not registering their name or address, shadow secretary of state for constitutional affairs Oliver Heald warned.
Data-sharing would also allow council tax inspectors to "raid" other databases such as the Land Registry to build up detailed records of every home, including taxable features such as scenic views and gardens.
"There is already public concern at government plans for a compulsory Identity Card Database, a nanny-state Children's Database and a property database for the council tax revaluation," said Mr Heald.
"Step by step, the government is logging details of every man, woman and child - and their home - in 'Big Brother' computers.
"For all of Labour's talk of human rights, it's clear their state inspectors have little respect for people's privacy."
Campaign organisation NO2ID - which has vehemently opposed the introduction of compulsory ID cards - criticised the government's "intention to reverse the presumptions of confidentiality".
"From now on, you can assume that anything you tell to an official or public servant will not only go on your record, but be passed on to anyone at all in 'the public interest'," said its national coordinator, Phil Booth.
"How many thousands of officials will now have free rein to snoop on your personal, business and children's lives?"
The Information Commissioner's Office, which was established to promote access to official data and to protect personal details, said information about individuals was "the lifeblood of many public services".
"Improving information sharing can help to deliver better, more effective services," said a spokesman.
"The government's new initiative provides a valuable opportunity to ensure that not only do individuals get the modern, joined-up public services they deserve, but also get the essential data protection safeguards they expect."
The department was "cooperating closely" with the government to work towards its objectives, he added.