Human beings may be forced to be 'microchipped' like pet dogs, a shocking official report into the rise of the Big Brother state has warned.
The microchips - which are implanted under the skin - allow the wearer's movements to be tracked and store personal information about them.
They could be used by companies who want to keep tabs on an employee's movements or by Governments who want a foolproof way of identifying their citizens - and storing information about them.
The prospect of 'chip-citizens' - with its terrifying echoes of George Orwell's 'Big Brother' police state in the book 1984 - was raised in an official report for Britain's Information Commissioner Richard Thomas into the spread of surveillance technology.
The report, drawn up by a team of respected academics, claims that Britain is a world-leader in the use of surveillance technology and its citizens the most spied-upon in the free world.
It paints a frightening picture of what Britain might be like in ten years time unless steps are taken to regulate the use of CCTV and other spy technologies.
The reports editors Dr David Murakami Wood, managing editor of the journal Surveillance and Society and Dr Kirstie Ball, an Open University lecturer in Organisation Studies, claim that by 2016 our almost every movement, purchase and communication could be monitored by a complex network of interlinking surveillance technologies.
The most contentious prediction is the spread in the use of Radio Frequency Identification (RFID) technology.
The RFID chips - which can be detected and read by radio waves - are already used in new UK passports and are also used the Oyster card system to access the London Transport network.
For the past six years European countries have been using RFID chips to identify pet animals.
Already used in America
However, its use in humans has already been trialled in America, where the chips were implanted in 70 mentally-ill elderly people in order to track their movements.
And earlier this year a security company in Ohio chipped two of its employees to allow them to enter a secure area. The glass-encased chips were planted in the recipients' upper right arms and 'read' by a device similar to a credit card reader.
In their Report on the Surveillance Society, the authors now warn: "The call for everyone to be implanted is now being seriously debated."
The authors also highlight the Government's huge enthusiasm for CCTV, pointing out that during the 1990s the Home Office spent 78 per cent of its crime prevention budget - a total of £500 million - on installing the cameras.
There are now 4.2 million CCTV cameras in Britain and the average Briton is caught on camera an astonishing 300 times every day.
This huge enthusiasm comes despite official Home Office statistics showing that CCTV cameras have 'little effect on crime levels'.
They write: "The surveillance society has come about us without us realising", adding: "Some of it is essential for providing the services we need: health, benefits, education. Some of it is more questionable. Some of it may be unjustified, intrusive and oppressive."
Yesterday Information Commissioner Richard Thomas, whose office is investigating the Post Office, HSBC, NatWest and the Royal Bank of Scotland over claims they dumped sensitive customer details in the street, said: "Many of these schemes are public sector driven, and the individual has no choice over whether or not to take part."
"People are being scrutinised and having their lives tracked, and are not even aware of it."
He has also voiced his concern about the consequences of companies, or Government agencies, building up too much personal information about someone.
He said: "It can stigmatise people. I have worries about technology being used to identify classes of people who present some kind of risk to society. And I think there are real anxieties about that."
Yesterday a spokesman for civil liberties campaigners Liberty said: "We have got nothing about these surveillance technologies in themselves, but it is their potential uses about which there are legitimate fears. Unless their uses are regulated properly, people really could find themselves living in a surveillance society.
"There is a rather scary underlying feeling that people may worry that these microchips are less about being a human being than becoming a barcoded product."