DNA profiles of almost a million innocent people are to be destroyed as part of a major overhaul of the police national database. They include people who have been arrested and never charged, and those taken to court but found not guilty.

Civil rights groups gave a cautious welcome to the proposals – which will be announced by the home secretary, Jacqui Smith, this week – but said more needed to be done.

An estimated 800,000 of the 5.1m DNA profiles on the database belong to people in England and Wales who have no criminal conviction.

A Home Office consultation paper will also outline plans to delete all physical DNA samples on the database, including mouth swabs, hair and blood. The move follows widespread concerns that the samples could be shared with third parties.

The campaign group Genewatch, which opposes the DNA database, has warned that health and drug companies want access to the samples to create profiles to predict who is genetically susceptible to different illnesses and diseases. There have also been fears the samples could one day be used for racial profiling or even to predict criminal behaviour.

The proposal to scale back the database and destroy the samples comes after a landmark judgment by the European court of human rights last December that ruled the government was wrong to hold the DNA profiles – the genetic codes that identify individuals – of innocent people indefinitely.

Yesterday Smith told the Observer that there were genuine concerns over the size and scope of the DNA database. “It is crucial that we do everything we can to keep the public safe from crime and bring offenders to justice,” she said.

“The DNA database plays a vital role in helping us do that. However, there has to be a balance between the need to protect the public and respecting their rights. Based on risks versus benefits, our view is that we can now destroy all samples.”

Legal experts said the government had little choice but to comply with the human rights court ruling.

“This is not a privacy-friendly Home Office,” said Shami Chakrabarti, director of Liberty. “Any developments in this area are because the Home Office has been dragged here by the European court of human rights.”

But the Home Office insists that in deciding to destroy all samples on the database it has gone much further than it was compelled to by the court’s ruling.

Last night privacy campaigners said the consultation must answer the crucial question of how long the police would be allowed to retain the DNA data of innocent people before being forced to delete them. There were also claims the proposals did not go far enough.

“The DNA database is already too big,” said Simon Davies, director of the campaign group Privacy International. “We would argue that the samples of anyone convicted of even minor offences should be removed.”

Despite mounting outrage over the use of the DNA database, the government insists that DNA can play an essential role in fighting crime. The Home Office says that between April 1998 and September 2008 there were more than 390,000 crimes with DNA matches.

DNA has played an essential part in solving thousands of cases, including finding Mark Dixie guilty of the murder of Sally Ann Bowman, the 18-year-old model murdered close to her home in Croydon, south London, in 2005, and the conviction of Steve Wright for the murder of five prostitutes in Ipswich.

It has also played a crucial role in proving innocence and overturning miscarriages of justice. Earlier this year DNA was a vital factor in proving the innocence of Sean Hodgson, who spent nearly 30 years in prison for the death of a young woman in 1979.