The ability for the public to opt out of disclosing personal information is inhibited by extreme coercion in the private sector and the rule of the law in the public sector, according to a report by think tank Demos.

The public and private sectors have realised the power of information before citizens, creating an imbalance of power that will prove difficult to change, says the study.

Although public sector information gathering has been widely criticised, the implications in the private sector are equally serious, says the report.

"The private sector builds trust and business by emphasising choice and consent," it says.

"But the ability to opt out of information gathering is inhibited by a sort of coercion - our ability to access services or products often depends on agreeing to privacy policies or data sharing notices."

The report notes that in the five-year period following the implementation of its Clubcard programme, Tesco increased sales by 52 per cent.

Despite these difficulties, consumers can still opt out of private sector information gathering, unlike in the public sector.

The report recommends that the Information Commissioner's Office be given more resources to regulate government in this area, and that privacy impact assessments be carried out for all public sector projects that would lead to compulsory information gathering.

Demos also called for a renewed debate on the national identity cards scheme.