Ministers are facing demands for answers after 25 million people's personal details were lost in Britain's worst ever data protection breach.
The "catastrophic" blunder by HM Revenue and Customs (HMRC) means nearly half the UK's population - including leading politicians and businessmen - are at risk of identity fraud.
Chancellor Alistair Darling revealed the staggering scale of the debacle in an emergency statement to MPs, as Paul Gray, the head of HMRC, fell on his sword.
Two compact discs containing names, addresses, dates of birth, child benefit numbers, national insurance numbers and bank or building society account details of some 25 million individuals and 7.25 million families have gone missing.
The Commons emitted a collective gasp as Mr Darling explained how a junior official sent the entire child benefit database from the HMRC HQ in Newcastle to the National Audit Office in London on October 18.
In flagrant breach of the agency's procedure, the package was not even posted recorded delivery through contracted courier TNT, and never arrived at its destination.
However, senior management at HMRC were not informed of the problem until November 8, with Mr Darling and Prime Minister Gordon Brown finally brought into the loop two days later.
The officials involved apparently waited to raise the alarm because they hoped the password-protected discs would "turn up".
The Metropolitan Police is now leading the hunt for the package, while Mr Darling has ordered a probe into security procedures at HMRC and the Independent Police Complaints Commission is also investigating.
The Chancellor stressed there was no evidence that the information had fallen into criminal hands and said the public would be protected against any fraud by the Banking Code.
Source The Guardian
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