Home Office Minister Beverley Hughes said today that people involved in organised crime and terrorism commonly use false identities but the police usually have to rely on other linked crimes to get a conviction.

"The new offence will make it much easier and swifter for police to arrest criminals for identity theft as they will be able to arrest the criminals for just possessing fake or stolen documents," she said.

The move will also reduce the number of people whose lives are shattered by identity theft. It can take a victim around 300 hours to put their records straight. ID fraud also costs the country more than £1bn every year.

The new offence would mean that possession of a false document - like a passport or driving licence - without reasonable cause would constitute an offence. The police must currently wait until they have enough evidence to prove conspiracy or the main criminal offence itself, but run the risk that the criminals may be successful, escape arrest or the prosecution fail.