automatic passwd creation?

Hello All,
I'm creating a site which allows people to add their links, 
Once they have been manually verrified in term of 
content, url & email I wish to be able to automatically 
create and email a passwd and username to them
which will allow them to securely update their own link.

I know how to create passwd files on my unix server for
use with .htaccess files, which I could use to allow access
to a cgi/perl script but:-
 
how can I automate that process?
Is their a better way?

Many thanks
Peter Newton

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