Britain has scrapped a controversial identity card scheme whose introduction by the previous Labour government as part of anti-terrorism plans had outraged civil rights activists.

The scrapping of the scheme has been approved after the the David Cameron government's first Home Office bill, the Identity Documents Bill, received royal assent.

The Identity Cards Act 2006 provided for a personal identification document and European Union travel document, linked to a database known as the National Identity Register.

All identity cards issued so far will be cancelled within one month and the National Identity Register, the database which contains the biographic information and biometric fingerprint data of card holders, will be physically destroyed within two months.

"The Identity Card Scheme represented the worst of government. It was intrusive, bullying, ineffective and expensive," Home Office minister Damian Green said.

"The Government is committed to scaling back the power of the state and restoring civil liberties. This is just the first step in the process of restoring and maintaining our freedoms," he added.

The Identity Documents Bill invalidates the identity card, meaning that within one month, holders will no longer be able to use them to prove their identity or as a travel document in Europe.

The Identity Card Scheme and associated work around biometrics has already cost the taxpayer 292 million pounds.

The government will now stop planned future investment in the scheme of 835 million pounds.

All existing cardholders will be notified in writing and the Identity and Passport Service will now inform international border agencies, travel operators and customers of the change in law.

The Office of the Identity Commissioner has also been closed.