The government has dropped plans requiring workers to sign up to a new digital ID system in order to prove their right to work in the UK.

Instead, Labour ministers say existing checks, using documents such as biometric passports, will move fully online by 2029.

Conservative leader Kemi Badenoch said Sir Keir Starmer was "clueless" and showing "no sense of direction whatsoever".

Business Secretary Peter Kyle said it showed the need for Labour ministers to better justify the reasons behind new measures.

"What I am concerned about is we get better at explaining our policies, we get better at showing the relevance of it," he told BBC 2's Politics Live.

The reversal is in the latest in a series of U-turns in recent weeks, including on inheritance tax for farmland and business rates for pubs.

Speaking at Prime Minster's Questions, the Tory leader welcomed the government's climbdown, branding the initial digital ID plan a "rubbish policy".

But she said the change of approach showed Sir Keir was "blowing around like a plastic bag in the wind", predicting that Labour would next U-turn on its controversial plans to scale back jury trials.

The prime minister hit back by pointing to policy reversals and ministerial churn under the previous government, accusing the Conservatives of having "crashed the economy" during their time in office.

"I'm determined to make it harder for people to work illegally in this country and that's why there will be checks, they will be digital, and they will be mandatory," he added.

When the government first announced the policy plan, it argued that mandatory digital ID for workers would make it easier to clamp down on immigrants working illegally.

The scheme, it is understood, will now deal less narrowly with immigration and the government will instead place more emphasis on the argument that digital ID can be a useful tool for the public when accessing public services.

Transport Secretary Heidi Alexander told BBC Radio 4's Today programme the government was still "absolutely committed" to mandatory digital right to work checks, including through biometric passports, and said digitising the system would help crack down on illegal working.

"The digital ID could be one way in which you prove your eligibility to work through a digital right to work check," she said.

"At the moment we've got a paper-based system - there's no proper records kept.

"It makes it very difficult then to target enforcement action sensibly against businesses that are employing illegal workers."

Former home secretary Lord David Blunkett, who supported ID cards when he was in government, told the same programme the government had not explained why the policy mattered or how it would work, so it was "not surprising" to see another U-turn.

"The original statement was not followed by a narrative or supportive statements or any kind of strategic plan which involved other ministers and those who are committed to this actually making the case," he said.

"As a consequence, those who are opposed to the scheme, for all kinds of nefarious and very different reasons, some of them inexplicable, were able to mobilise public opinion and to get the online opposition to it up and running."

Polling showed that public support for digital ID collapsed after Sir Keir's announcement, falling from just over half the population being supportive in June to less than a third of the population just after his speech.

Nearly three million people have signed a parliamentary petition opposing the introduction of digital IDs.

There has also been nervousness among some Labour MPs over the compulsory aspect of the original proposal.

Whatever they think of the change to this specific policy, Labour MPs are growing increasingly frustrated with the government's U-turns.

Some had already been wary of defending controversial government policies to their constituents because they feared that the policy would inevitably be reversed.

One furious Labour MP told the BBC last night that the latest U-turn was "an absolute car crash", adding: "The boys at No 10 jumped into it with no thought, marched the PLP up the hill only to bottle it, take all the pain and no credit."

The Liberal Democrats said the policy was "doomed to failure" from the start and called for "the billions of pounds earmarked for their mandatory digital ID scheme" to be spent "on the NHS and frontline policing instead".

The party's Cabinet Office spokesperson, Lisa Smart, said: "No 10 must be bulk ordering motion sickness tablets at this rate to cope with all their U-turns."

Reform UK leader Nigel Farage said in a post on X: "This is a victory for individual liberty against a ghastly, authoritarian government. Reform UK would scrap it altogether."

Green Party leader Zack Polanski welcomed the news on X, saying: "The government have U-turned on ID cards. Good."

A government spokesperson said: "We are committed to mandatory digital right to work checks.

"Currently right to work checks include a hodge podge of paper-based systems with no record of checks ever taking place. This is open to fraud and abuse.

"Digital ID will make everyday life easier for people, ensuring public services are more personal, joined-up, and effective, while also remaining inclusive."

Employers already have to check if someone they want to hire has the right to work in the UK.

Since 2022, employers have been able to do checks on passport-holding British and Irish citizens using digital verification services certified by the government.

There is also a Home Office online scheme which verifies the status of some non-British or Irish citizens, whose immigration status is held electronically.

The details of how digital ID will work have yet to be set out but it is expected to be based on two government-built systems: Gov.uk One Login and Gov.uk Wallet.

Currently more than 12 million people have signed up to One Login, which can be used for services such as applying for a veteran card, cancelling a lost passport or managing a lasting power of attorney.

Gov.uk Wallet has not yet been launched but would allow people to store their digital ID on their smartphones.

The digital ID would include name, date of birth, nationality and residence status and a photo.