A plan to share people's personal details between government departments on a database would be a threat to privacy, the Conservatives say.
Ministers will consult the public before sharing information
Shadow constitutional affairs secretary Oliver Heald accused the government of "moving one step closer to a 'Big Brother' state".
But the government believes a database would give the public better access to vital services.
Tony Blair is expected to unveil the proposal in Downing Street on Monday.
Work and Pensions Secretary John Hutton said departments already stored "vast amounts of data about individual citizens".
But the information is not shared intelligently across various government agencies, he said.
For example, one family had to contact the government 44 times to confirm various details after a relative died in a road accident, Mr Hutton said.
"We can improve the quality of public services if we are prepared to share data more intelligently."
Ministers intend to consult the public to see if they are in favour of the data-sharing plan.
Five "citizens' panels" of 100 people are being recruited by the polling organisation Ipsos Mori.
Mr Heald raised concerns over the government being able to "set up a database from the cradle to the grave".
"Are they going to have enough security with this massive new database to ensure that it isn't hacked into and that identity theft doesn't occur?" he told the Radio 4 programme Broadcasting House.
The Liberal Democrats accused the government of stripping the public of its privacy.
"Blair's Britain now has the most intrusive government in our history," leader Menzies Campbell said.
"There is no part of people's lives which is free from snooping.
"State intervention and control expands every day. It is time we put a halt to this." he added.
Human rights group Liberty said the government had contempt for people's privacy.
"This half-baked proposal would allow an information free-for-all within government - ripe for disastrous errors, and ripe for corruption and fraud," the group's director Shami Chakrabarti said.