In a U-turn, the government has ditched plans to force people to get a biometric ID card when they renew or apply for a passport.
Home secretary Jacqui Smith also announced on Thursday that compulsory ID cards for all British citizens may now be delayed until 2015, subject to a future Parliamentary vote.
But the government still intends to force foreign nationals living in Britain to register their biometric details on the National Identity Register and carry an ID card by the end of this year.
Smith also set out plans to issue ID cards to people working in airports and other high security-risk areas from next year, a plan that has come under fire from trade unions.
After that the target is students and young people, who will voluntarily have the option of registering for an ID card from 2010.
Anyone renewing or applying for a new passport from 2011 onwards will be required to add their biometric details to the National Identity Register, but they won't now be forced to pay for a physical ID card and can instead choose to just use their passport.
The government estimates the combined cost of getting a biometric passport and ID card would be around £100.
For the few who are likely to actually want a standalone biometric ID card, they will also have the option of paying to get one without getting a new passport.
The latest ID card consultation plans also reveal that people will face fines of up to £1,000 for missing appointments to register their biometric details on the National Identity Register.