The information contained on a memory stick was not encrypted

Ministers have been accused of a "massive failure of duty" after thousands of criminals' details, stored on a computer memory stick, were lost.

The Tories say the Home Office appears "incapable" of keeping data secure and criminals may seek compensation.

Details of 84,000 prisoners in England and Wales were lost by private firm PA Consulting. The Home Office said a full investigation was being conducted.

The information commissioner's office described it as "deeply worrying".

The missing memory stick includes un-encrypted details about 10,000 prolific offenders and data on all 84,000 prisoners in England and Wales.

'Horrified'

A Home Office spokesman said the data was lost by PA Consulting, a private contractor working for the Home Office, and was "held in a secure format on site and downloaded onto a memory stick for processing - which has since been lost".

Shadow Home Secretary Dominic Grieve said he was "absolutely horrified" by the loss and "government incompetence".

Searching questions must be answered about what safeguards were in place David Smith, Information Commissioner's Office

PA Consulting has searched its premises and looked at CCTV recordings in an attempt to recover the missing memory stick.

It is the latest in a string of lost data incidents for the government, including stolen laptops, lost computer discs and memory sticks and files left on trains.

The Home Office was told by PA Consulting on Monday that the data might be missing and the contractor confirmed on Tuesday it had failed to uncover the memory stick but it was not clear how it came to be lost.

'Serious consequences'

The data on the stick also includes information from the Police National Computer of some 30,000 people with six or more convictions in the last year.

Details of serving prisoners included names, addresses, dates of birth and in come cases release dates.

The transfer of further data to PA Consulting on the project has been suspended pending the investigation.

The Conservatives have accused the government of a "massive failure of duty".

Shadow home secretary Dominic Grieve said the Home Office "has a habit of doing this".

He said: "It's entrusted with a great deal of highly confidential material and it seems to be entirely incapable of keeping it secure.

"And the consequences are very serious. They're serious because it may lead to the identity of the people involved being revealed."

"One of the possible consequences is that they [criminals] will bring legal actions against the government and the taxpayer will then have to pay damages to people, who appear to be pretty undeserving, because of the government's incompetence."

'Toxic liability'

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.

"It is deeply worrying that after a number of major data losses and the publication of two government reports on high profile breaches of the Data Protection Act, more personal information has been reported lost," he said.

He said sensitive information, such as prisoner records, must be held securely at all times and said his office expected to be provided with a copy of the internal investigation report.

If you hand out memory sticks almost like confetti to companies and ask them to do research for you, then you have to be absolutely certain... that the company concerned has put in practice procedures which will be just as robust as the procedures that I hope the government has followed Keith Vaz

"We will then decide what further action may be appropriate. Searching questions must be answered about what safeguards were in place to protect this information," he said.

Labour MP and chairman of the home affairs select committee Keith Vaz told BBC Radio 4's Today programme he hoped the government had put adequate safeguards in place.

"If you hand out memory sticks almost like confetti to companies and ask them to do research for you, then you have to be absolutely certain... that the company concerned has put in practice procedures which will be just as robust as the procedures that I hope the government has followed," he said.

A spokesman for PA Consulting refused to comment on the data loss.

Earlier this month the BBC apologised after a memory stick containing the personal details of hundreds of children who had applied to take part in a TV show was stolen from a vehicle.

On Tuesday, a BBC analysis found sensitive data potentially affecting more than four million people had been lost by government departments in the year to April.

Cases included the loss of the National Insurance numbers of 17,000 people and the theft of a laptop with encrypted details of 17,000 Sats markers.

The details of 25 million child benefit claimants vanished last year.

The incident led to the recommendation that government departments should give details of personal data losses.