Human rights groups and data protection advocates have argued that the Prime Minister’s initiative to weaken data protection laws and enable government agencies to share an individual’s personal details will dramatically invade privacy.

The government claims that sharing private details between departments will improve public services and wants to review policies including those on data protection, which limit information being passed between departments.

Tony Blair wants to ask a specially convened panel of citizens for their views on changing the data protection law, but Liberty warned that relaxing these rules could cause excessive surveillance and data-sharing.

Director Shami Chakrabarti said. “This is an accumulation of our government’s contempt for our privacy. This half-baked proposal would allow an information free-for-all within government – ripe for disastrous error, corruption and fraud.”

As the Data Protection Act now stands, a person's private details can be accessed only with their consent and cannot be passed from one government department to another, something the government feels is proving to be an “obstacle to improving public services”.

"Some individuals can regularly deal with as many as 30 agencies, none of whom share information on that individual," said Work and Pensions secretary John Hutton.

The policy review aims to break down barriers between information held on one person by several government departments. The government claims it is not a move towards a "Big Brother” state, but critics of the plan are unconvinced.

The Information Commissioner's Office (ICO), said: "We all want to see information used to provide high-quality and efficient public services, but public trust and confidence may be jeopardised by wholesale or unrestrained sharing of personal information."

Ross Anderson, professor of security engineers at Cambridge University and spokesman for the Foundation for information policy research (FIPR) told Computeractive: “It is interesting that Tony Blair has recognised that the sharing of data is illegal and the government does face barriers. This is something we, as an organisation, have been saying for years.

“In Germany it is illegal for any private information to be shared, but our government seems to be in bed with the IT industry and keeps pushing for central information systems.”

The public, he added, has a choice when it comes to sharing their personal information with the government, especially as laws are already in place to protect information held on them.

“Consumers should not be bullied into making their records public," said Anderson.

"Logging on to thebigoptout.org will provide people with a letter they can send to their GP that tells him they do not want their medical records posted on the Government’s centralised health database, which comes into effect this spring,” he added.

In the new policy proposal, members of a citizens' panel will be asked about the level of customer care they expect from public services.

Within this they will be asked to discuss the "trade-offs" needed, and what they expect services to do on their behalf to provide them with personalised services.

They will be asked questions about how much information they assume is already shared between agencies and how much are they willing to allow.

The deliberative forum was launched on Monday 15th, and will report back to cabinet in early March.