The minister told MPs on Parliament's Education and Skills Select Committee that new money would be found to support the creation of the database.
Hodge's suggested cost of the system is relatively low for a government IT project.
But a spokeswoman for the Department for Education and Skills said a decision on financing the database would not be taken until the Government's 2006 spending review.
Hodge also told the committee she did not support information commissioner Richard Thomas's calls for a cheaper database focused only on vulnerable young people. "With a universal database it will be easier to track down children who are missing universal services," she said.
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