Personal details of 84,000 prison inmates lost in security blunder

Information on tens of thousands of criminals – including expected release dates – was lost while private contractors hired by the government were transferring files between computers.

The blunder could lead to gang warfare and leave the taxpayer liable for compensation pay-outs to every prisoner in England and Wales, it was warned last night.

Critics of the proposed identity cards said the blunder was evidence that the government could not be trusted to run the scheme.

The information had been encrypted, but was decoded and placed on a memory stick, which has since vanished. The names, birthdays and expected release dates of 84,000 prisoners – the entire prison population of England and Wales – were on the memory stick.

Names, addresses and dates of birth of 33,000 criminals who had committed at least six serious crimes in the last year were included, as well as details of 10,000 "priority" criminals. There were also the initials of people on drug treatment programmes.

The data was lost by management consultants PA Consultants, who told the Home Office on Monday about the blunder. Ministers were alerted on Tuesday after a search of offices failed to find it.

Officers from Scotland Yard's Specialist and Economic Crimes Unit have been brought in to establish what has happened to the stick. But a spokesman from the Metropolitan Police revealed that they were only asked for help by the company yesterday. And he hinted that the stick had been mislaid by an individual.

The spokesman said: "Officers are currently meeting with PA Consulting to review the circumstances of the loss by their member of staff. There is no (criminal] investigation at this stage."

The Information Commissioner was alerted to the breach last night and has launched an independent investigation.

Last night, Dominic Grieve, the shadow home secretary, described the loss as a "massive failure of duty". Pointing to previous data-loss scandals, he said: "What is more scandalous is it is not the first time the government has been shown to be incapable of protecting the integrity of highly sensitive data, rendering them unfit to be charged with protecting our safety.

"The British taxpayer will be outraged if they are made to pick up the bill for compensation to serious criminals."

Liberal Democrat leader Nick Clegg said: "People will start wondering whether ministers are capable of keeping any data safe anywhere in the country.

"If this government can't keep data about criminals safe, why should we trust them with the data of millions of innocent Britons in an ID card database?"

David Smith, deputy commissioner in the Information Commissioner's Office, said the latest loss showed that personal information could be a "toxic liability" if not handled properly. He called for data protection to be taken seriously at all levels and sensitive information to be held securely at all times.

Juliet Lyon, the director of the Prison Reform Trust, said: "People are sent to prison to lose their liberty, not their identity. It seems extraordinary that a private company should be entrusted with, and then lose, so much confidential data."

The data lost this week is part of the JTrack system of managing serious offenders. The system is used by police forces and justice boards to keep tabs on prolific offenders who have left custody.

A Home Office spokesperson confirmed the loss, but refused to say if there would be security implications. They confirmed an investigation had begun.

Jacqui Smith, the Home Secretary, is likely to face criticism for not publicly commenting on the loss.

The government has been hit by several serious data losses. The biggest involved 25 million records when everyone receiving child benefit had details lost by HM Revenue and Customs last year.

In June, ministers admitted losing secret files on al-Qaeda and Iraq's security forces. The files were left on a train.

In the same month, the theft of Cabinet minister Hazel Blears' laptop from her constituency office was reported.