Home Office Minister Liam Byrne, MP for Birmingham Hodge Hill, was accused of trying to mislead the public over the cost of identity cards when he revealed the bill would be £5.4 billion.
It was the first time the Government had set out a total cost for the controversial project, which will force every adult to pay for a "biometric" card which stores fingerprint and iris scan details.
But Nick Clegg, the Liberal Democrat Home Affairs spokesman, said the figures were "difficult to believe".
David Davis, the Conservative Shadow Home Secretary, said the true cost could be £20 billion.
The national identity card scheme will cost £5.4 billion to set up and run over the next 10 years, Mr Byrne told the House of Commons. The figure includes £810 million on new computer technology and £100 million of VAT to be collected by the Treasury.
Mr Byrne said every foreign national in the UK would need a biometric ID card by 2008, to prevent them claiming benefits they were not entitled to or working without a permit.
He said: "Illegal working will become far more difficult as the National Identity Scheme is rolled out.
"Any employer would be able to check a person's unique reference number against registered information about their identity to find out whether someone is eligible to work in the UK."
But Mr Clegg said: "It is difficult to believe anything the Government says about the cost of ID cards, given that in the past they have either tried to hide the costs or spectacularly under-estimated them.
"Given the Government's abysmal record on IT projects, such as the massive cost over-runs on the NHS computer system, the public has every right to maintain a healthy scepticism about this figure."
Mr Davis said: "The Home Office has an absolutely appalling record for delivering IT based projects on time and on budget.
"Independent experts have predicted this plastic poll tax will in fact cost nearly £20bn. Some of this money could be spent on a much needed prison building program."
Identity cards would "do nothing" to improve Britain's security, he said.
Shami Chakrabarti, Director of pressure group Liberty, attacked claims that identity cards would deal with abuse of the immigration, saying the Government initially claimed they would help defeat terrorism.
She said: "No doubt at some point ID cards will be the cure to obesity and global warming as well."