Big Brother Britain: How much do you earn? Are you gay? Town Hall chiefs have been ordered to find out

The forms will ask householders to give details of their children, mortgage, ethnic background, religion and sexual orientation.

Civil rights campaigners yesterday called the survey 'intrusive and very sinister', pointing out that any information handed over will not be kept confidential.

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Ministers have even given instructions that local councils must try to disguise their involvement in the survey to avoid attracting criticism.

And they have ruled that the questioning must be paid for out of council tax and carried out every two years.

The New Place Survey - which is expected to be launched next autumn after trials in the spring - is likely to cost at least £15million by 2012.

According to a consultation paper distributed by Communities Secretary Hazel Blears, the justification for the survey is that it will let the Government know if councils are hitting scores of new targets imposed on them in the last six months.

But the questionnaire does not ask about householders' attitudes to libraries, rubbish collections or schools - all of which are the responsibility of councils.

Instead, it solicits information on whether people think local parents are controlling their children's behaviour properly and whether different ethnic communities in the area are getting on with each other.

Questions on ethnicity and sexuality are intended to be used in Government initiatives to promote greater numbers of local councillors from minority groups.

But the demand that individuals and families supply a huge raft of personal details for the survey comes at a time of deepening concern about the State's thirst for ever-greater amounts of private information - and worries over how that information is stored and used.

Town halls are already assembling a database called ContactPoint which will contain details of every child in the country, including information on their health and education.

Yet more vast amounts of personal information will be stored on the NHS and identity card databases.

Whitehall has given no details on what proportion of the population will receive demands for information.

But many thousands in each borough are likely to get forms to ensure the target numbers of replies is reached.

Unlike the ten-yearly national census, it will not be legally compulsory to fill in and return the form.

However, those who do not comply are likely to be sent multiple reminders.

Information provided for the new council survey will not be protected by basic confidentiality rules.

The Department for Communities and Local Government has told town halls there are no guarantees of privacy and that personal data gathered in the questionnaires can be disclosed to third parties.

Although respondents are not asked for their names and addresses on the forms, town halls are likely to keep this information with the completed survey data on their computer systems.

Local Government minister John Healey said the New Place Survey "will be a significant tool for councils and local agencies".

But Tory local government spokesman Eric Pickles said: "This is astounding.

"Labour are obsessed with rolling out survey after survey to cover-up their incompetence."

Matthew Elliott of the Taxpayers' Alliance said the operation was a "pointless waste of money".

"Councils should be trying to make people's lives better by reducing the burden of taxes and improving crumbling services, not poking their noses into our lives," he added.

Christine Melsom of the council tax protest group Is It Fair? said: "This is highly intrusive and very sinister.

"I can think of an awful lot of other things they could do with the money."