Information Commissioner Richard Thomas is one of the two men in charge of the consultation, which will focus on the use and sharing of information. The other is Government science and technology advisor Dr Mark Walport.
The consultation will consider changes to the Data Protection Act and will present Government with options for changes to the law.
“The review will be concentrating on information sharing. When do public bodies, in particular, need to make use of personal information held by others to do their job properly?" said Thomas. "Law enforcement, child protection and more personalised services may be examples. But we will need to assess the dangers if information is shared too freely."
Prime Minister Gordon Brown announced in October that a review of data sharing would take place, when it emerged that HM Revenue and Customs (HMRC) had lost two CDs containing personal details, including bank account information, belonging to every person claiming child benefit.
The review will cover the private and the public sector and is scheduled to report its findings in the first half of 2008.
The consultation will talk to experts in the field of privacy and data protection, a Ministry of Justice statement said. "We want to know that our information is safe, secure and protected from misuse. Exactly how is our information being used? How can we be sure it is being used lawfully? Who holds our information and to what end? And what impact is the sharing of personal information having on our private lives?" it said.
The review will examine whether Thomas's office should have more powers, something he has consistently lobbied for. The Information Commissioner's Office (ICO) could only audit a body's information policies with that organisation's permission, but Brown said that this will be changed in relation to public bodies in the aftermath of the HMRC data loss.
The consultation is open until 15th February next year.