According to TechMarketView, the original tender notice valued the contract at between £60 million and £300 million.

Gemalto, which replaces incumbent IBM on the contract, will be responsible for providing between 40 and 80 million secure permit documents as part of the multi-year deal.

These include digital tachograph cards and biometric residence permits.

Simon Tse, CEO of DVLA, said: "The new contract we have signed delivers millions of pounds of saving for the UK taxpayer and allows DVLA to issue even more secure driving licences, and provide the next generation of high security smart cards for other parts of UK government."

IDC analyst Jan Duffy said that the contract award was an indication of how competitive the government market has become.