The UK government wants to relax data protection laws so it can share information on citizens across different agencies, but critics have decried the proposal as step towards a "big brother" state.
Under the proposal, people would be asked to give their permission before their data is shared. In most instances, UK government agencies by law can't share people's personal information.
The goal is to improve government services and avoid citizens having to give the same personal information to multiple agencies.
The issue of data privacy is highly sensitive in the UK, where the government has several massive IT projects under way involving the national health service (NHS), border controls and national ID cards. All have raised issues over how data will be stored and accessed in databases.
Government officials were quick to say they do not plan a central database to hold the information, widely regarded as a potential security problem.
"There is no question at all of this being a further step down the road to a big brother state," said John Hutton, secretary of the Department of Work and Pensions, speaking on the BBC Radio 4 "Today" program Monday morning.
Hutton said the plan is aimed at avoiding the hassles of the kind one family experienced recently after the death of a relative in car crash. The family had to contact government agencies 44 separate times after the death within six months, he said.
"That is not an acceptable level of government service," he said.
No2ID, an activist group that watches privacy issues in the UK, said Hutton's example highlights the need to fix government procedures rather than a need to loosen data protection rules.
"It’s a ludicrous and actually rather sickening excuse to prey on someone’s personal circumstances in order to justify this bureaucratic festival," said Guy Herbert, No2ID general secretary.
Britain's data protection laws were developed over decades to protect against abuse by the state, Herbert said. No2ID has warned that the government plans may result in a "super database" of personal data that could put people's privacy at risk.
The government started a consultation on Monday involving 100 members of the public, who will debate the plan and report back to Prime Minister Tony Blair's cabinet in early March.