Biometric facial scans taken for passports, driver's licences or nightclub entry can now be stored in police and spy agency databases, under changes to Australia's privacy laws.

The Gillard Government's new privacy legislation has removed the ban on biometric data being handed to crime-fighting agencies.

Officials say the move could be of immense benefit in fighting crime, but privacy lobbyists liken it to a "Big Brother" development.

The Attorney-General's Department yesterday revealed police would be able to ask private companies - including shops, pubs and clubs - to hand over patrons' facial scans.

"These changes will allow, for example, a pub to pass on to police a face scan of someone involved in a glassing attack," a spokeswoman said.

"Or, police could ask a government agency to help them identify an alleged murderer through matching an image obtained via CCTV (closed circuit television) with client photos."

The spokeswoman said the Privacy Act would not compel any company or government agency to hand over biometric data to law enforcement bodies.

Biometric data has now been reclassified as "sensitive data", meaning government agencies must apply stronger privacy safeguards.

"Information can only be shared with law enforcement agencies in strictly limited circumstances with increased privacy protections," the spokeswoman said.

The power for police to store biometric data that was originally provided for a passport or driver's licence is buried within 290 pages of explanatory memoranda for the legislative amendments, passed during the Parliament's final sitting week this year...