More than 60,000 people will have to pass lie detector tests when they discuss their benefit claims with Birmingham City Council.
Britain's biggest local authority is to run a pilot project for the Government, using computer software to monitor phone calls in an attempt to identify fraudulent council tax and housing benefit applications.
Council staff are being trained to use voice risk analysis technology when checking applicants' personal circumstances.
The aim is to detect changes in a caller's voice which could indicate a false claim is being made, according to the Department for Work and Pensions, which is paying for a three-month experiment in Birmingham.
A DWP spokesman said: "These changes are measured against the caller's normal voice which is recorded at the beginning of the phone call, ensuring that nervousness or shyness is not a trigger.
"If, during the pilot, benefit staff assess the answers as suspicious then the caller may be asked to provide further evidence to support their claim."
The idea has already triggered strong opposition from trade unions, which argue that lie detector tests are unreliable and may even scare innocent people into dropping valid claims. An entry on the TUC website, headed 'Lies, damned lies and lie detectors', warns: "The most fundamental problem is that lies are psychological, not physiological phenomena. Some people are not upset if they lie, some others feel guilt and others feel shame.
"In some people the guilt or shame will translate into anxiety, in others not, or not to the same extent.
"Lie detector tests have a glamorous film noir air to them, but the reality is that we aren't dealing with Mafia dons lying about what happened to business competitors, but with some of the poorest and weakest people in the country."
The new technology will be used from the end of this month during the 65,000 calls made each year by the council to check whether claimants still qualify for benefit.
Applicants will be told about the voice recognition technology and offered the alternative of a face-to-face interview with a benefits official if they do not want to continue with the phone call. Similar technology is already used in the insurance industry and gives a good indication of the level of risk, the DWP said.
Birmingham runs the biggest welfare benefits programme of any local authority in Europe, paying £420 million to 134,000 claimants a year.
The Government believes fraudulent claims may amount to £20 million.
Benefits service officials investigated almost 6,000 fraud allegations last year, but only 93 claimants were successfully prosecuted for an estimated £1 million of illegal payments.
A council spokes-woman said a 15-minute phone call would replace a "time consuming" form currently sent to claimants. It would be easier and more convenient customers.
The spokeswoman added: "The technology used during the pilot, which analyses changes in the caller's voice will enable swift verification of the information customers provide and allow for speedier processing.
"All of our telephone staff have been properly trained to conduct the call as efficiently as possible. We hope that this new way of working will prove popular with our customers but we will be carrying out a satisfaction survey before we take a decision to extend the trial."
Work and Pensions Minister James Plaskitt will visit Birmingham to see the pilot in action.
The move has the backing of Work and Pensions Secretary John Hutton, who is considering having the system rolled out across the country.
Mr Hutton said: "Our investigators are successfully using sophisticated 21st century techniques to stop criminals.
"The introduction of this cutting edge technology will be another weapon in the battle against benefit fraud."