The passport stamp could become a thing of the past
Bernard Herdan said the idea could link in with Home Secretary David Blunkett's plans for an "entitlement" card - seen as a move towards controversial compulsory ID cards.
The move would be a big step but is being considered by many other nations, he added.
Asylum seekers were last month issued with such cards, carrying their family details, nationality, date of birth and other data.
The new passports concept would take that a step further, but could meet opposition from those campaigning against ID cards.
Mr Herdan told Computing magazine: "This is about allowing people to assert their own identity, preventing fraud and stopping identity theft. This is not about Big Brother.
Opposition
"This would allow us to link a person's identity to a biometric, such as an iris scan, facial recognition or a fingerprint."
For the foreseeable future, however, smart cards could only supplement the traditional passport books because many countries use only border control stamps.
The idea behind Mr Blunkett's idea of "entitlement" cards is to stamp out benefit fraud, tax evasion and illegal immigrant workers.
The cards would also include identity information and Mr Herdan argues the two ideas could be merged.
"Our advice is that if you want a very secure identity, a database linked to a biometric system is the way to go, but it's up the government to decide," he said.
The passport service chief executive would like the new passport cards in place by 2006 but has not decided whether or not they should be introduced in phases.
Civil liberties groups have already criticised the entitlement card plans, although the Home Office says it will not be compulsory to carry the cards.
Home Office Minister Mike O'Brien has also argued the plans, estimated to cost £1bn, are too unwieldy and expensive.
Merging the passport and entitlement card projects would save costs but opponents may still say it is more expensive than keeping the status quo.
But there is speculation the cards could also be used as a driving licence - the current system costs £55m a year to run.