Home secretary Theresa May has ordered a review of the Automatic Number Plate Recognition system that records the licence plates of up to 14 million cars each day.
The government is to look at restricting the access to the database, which contains around 7.6 billion images. The amount of time that the pictures are stored for will also be subject to review, as there is no maximum time at the moment.
The announcement comes after it emerged that 72 ANPR cameras in areas of Birmingham with large Muslim populations have been removed as they were financed by a Home Office counter-terrorism fund.
Home Office minister James Brokenshire told the Guardian the national changes were necessary for public confidence.
"Both CCTV and ANPR can be essential tools in combating crime but the growth in their use has been outside of a suitable governance regime,"
The system was started in 2006 and was originally intended to crack down on uninsured drivers and stolen cars, but former home secretary Jacqui Smith signed an agreement in 2008 that allowed details to be passed on to foreign governments.