The Government's majority was 292, in a vote that ran 385 for and 93 against.
"There is an entirely false claim that ID cards will erode our civil liberties, will re-visit 1984, will usher in the Big Brother society or establish some kind of totalitarian police state," the new Home Secretary, Charles Clarke, told the House. "A secure identity scheme will help to prevent terrorist activity – more than a third of which makes use of false identities."
"Quite apart from the security advantages, there will be enormous practical benefits. ID cards will potentially make a difference to any area of everyday life where one already has to prove identity."
The Government published its proposals for the national ID card scheme in April, including draft legislation that would allow for a database to be kept containing detailed personal information on cardholders, and which could potentially create an electronic fingerprint of everyone who uses a service, such as the NHS, that requires an ID card check.
It is planned that the scheme will be ready by 2007-2008 although it is unlikely to be made compulsory until 2013, after further legislation has been passed. A new National Identity Scheme Commissioner will oversee the workings of the system.
Experts and civil liberties groups are outraged by proposals which they see as rushed, over-reaching and damaging to human rights.
Some politicians are concerned by the implications too, as evidenced by the large-scale abstentions last night.
The Conservative party threw itself behind the Bill last week. Some commentators suggest that this was simply to prevent Labour touting itself as the party of law, order and security in the run up to the next General Election, expected in May 2005.
The Tory leader is thought to be in favour of the cards while prominent members of his shadow cabinet are not, including Shadow Home Secretary David Davis, who found himself supporting the measure on behalf of his party, while urging that the Bill be properly scrutinised by a joint committee of both Houses.
"I would not have countenanced ID cards before 9/11 but after 9/11, I accept we have to consider them because it is incumbent on all of us to examine carefully any measures which might enhance the nation's security," he said. "Identity cards introduced properly and effectively may indeed help to do that."
Among the Tory rebels last night were former frontbench spokesman John Bercow, and former Minister Peter Lilley, while senior politicians John Redwood, Tim Yeo and Nicholas Soames did not vote on the measure.
Labour rebels included three former cabinet ministers, Clare Short, Glenda Jackson and Kate Hoey.
The Liberal Democrats, which oppose the Bill, voted against. Speaking yesterday before the vote, Mark Oaten MP, Liberal Democrat Shadow Home Secretary, said: "Not a single one of the Government's arguments for identity cards adds up."
He added that the Liberal Democrats would scrap the identity card scheme and "use the savings to put 10,000 more police on the streets, cutting crime and preventing terrorism."