“Technology now makes it possible for digital identities to be more secure than physical ones, but we remain clear that they will not be made mandatory.”

The virtual licences could be used at supermarket self checkouts, the Times said,, external allowing customers to verify their own age without waiting for a member of staff.

The new digital licences will be introduced later this year, the newspaper reported.

A possible feature could allow users to hide their address in certain situations, such as in bars or shops.

There were more than 50 million driving licence holders in the UK in 2023, according to government data., external

The digital licences are likely to be launched as part of a “wallet” within a new government app called Gov.uk.

The wallet is understood to be secured in a similar way to many banking apps, and would only allow the genuine owner of a licence to access it.

It will use features found on many smartphones, such as biometrics and multifactor authentication, like security codes.

The government is said to be considering integrating other services into the app, such as tax payments and benefits claims.

Other forms of identification, such as national insurance numbers, could also be added – but it is not thought physical identification will be replaced entirely.

The new technology appears to stop short of being a broad digital ID card – as previously called for by Sir Tony Blair and Lord William Hague.

At the time, the head of privacy campaign group Big Brother Watch said such a move “would be one of the biggest assaults on privacy ever seen in the UK”.

In 2016, the then-boss of the UK’s Driver and Vehicle Licensing Agency (DVLA) said digital licences were being developed.

Virtual licences are already in use in Australia, Denmark, Iceland and Norway, as well as some US states.

In the European Union, every member state is required to introduce at least one form of digital ID by 2026.