Brussels is demanding that 26 police forces across the EU should have access to the personal details of every motorist in Britain.
The Government is being threatened with fines totalling millions of pounds unless it obeys the ‘Orwellian’ edict.
Foreign police also want open access to the UK’s national DNA database and fingerprint records so they can check them against crime scenes and camera footage.
MPs and civil liberties groups fear identity mistakes will lead to Britons being accused of crimes they have not committed.
But there is particular alarm at the idea of overseas police having access to information about every registered driver in the UK.
The Driver and Vehicle Licensing Agency database contains details of 38million drivers.
If foreign police give the British authorities a single wrong digit from a number plate – or if criminals have cloned a UK registration – then the officers would be given names, addresses, purchase details and a wealth of other personal information on the wrong suspect.
Motorists could then face a lengthy ordeal to prove their innocence. There are fears that, once a foreign force has the DVLA data, it could fall into the wrong hands or be ‘lost’.
Concerns have also been raised about checks against Britain’s DNA database, which is the largest in the world. Some EU countries have worryingly high error rates when it comes to checking DNA samples.
European rules allow police to conduct tests of a lower quality than are permitted in Britain.
Academics in the Netherlands, which has been running the scheme for four years, found that two-thirds of ‘matches’ at the lowest level wrongly identified an innocent person as a genetic match.
The nightmare scenario could see a Briton placed under a European Arrest Warrant and bundled off to another country before they can prove mistaken identity.
Labour quietly signed Britain up to the regime, known as the Prum Treaty, in 2008, and it was supposed to come into force at least two years ago.
But Home Secretary Theresa May – concerned about civil liberties and handing too much power to Brussels – is yet to implement the diktat.
According to European Commission papers seen by the Mail, this has angered the Eurocrats, who are now threatening to issue Britain with ‘infringement proceedings’ if it does not obey by the end of 2014.
The ultimate sanction is a fine issued by the European Court of Justice. The minimum is £7.5million for each ruling against the UK.
The Commission report admits: ‘A considerable number of member states consider that the matching rules, in particular for DNA data, are not fully satisfactory and should be designed in a better way so as to avoid matches that are identified as false upon subsequent verification.’
But it then goes on to say there should be no excuse for Britain and a small number of other member states who are resisting implementing the regime. Last night Tory MP Dominic Raab, who unearthed the Commission’s report, called the scheme ‘Orwellian’.
He said: ‘It beggars belief that in the same report that acknowledges the vulnerability of the regime to mistakes and serious risks of overloading national systems, the Commission is threatening to fine Britain and other member states for not doing its bidding. This reckless scheme is a disaster waiting to happen.
‘The risks of data-sharing on such a massive scale have not been addressed, especially given the potential for innocent people to be caught up in the investigations of foreign authorities, and the risk of criminals gaining fraudulent access to such information.’
Supporters of the treaty argue that it will help to fight cross-border crime. They say British police will get access to information on foreign suspects living in the UK.