The Tory Party has written to firms involved in bidding for ID card contracts and told them to think long and hard before signing anything.

Chris Grayling, shadow Home Secretary, told Radio 4's Today programme that firms should think before committing cash and other resources to bidding, preparing for work or signing contracts. He said he was aware of possible "poison pill" provisions within contracts which might make them difficult to break.

Grayling said he was concerned at hints made by ex-Home Secretary 'Wacky' Jacqui Smith that there were provisions in the contracts to make scrapping the scheme more difficult.

He said it was a costly scheme which the UK could not afford and warned companies to be cautious.

Asked if the ID card scheme had a real future regardless of whether the Tories win the next election, Grayling said there were mixed messages coming from new Home Secretary Alan Johnson.

The relevant clip from the Today programme is here.

The most recent contract win was by money maker De La Rue which will make the cards in exchange for £400m.

IBM and CSC have won contracts for the database and the application process.

The full text of the letter is on the next page.

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