A recent data breach at the Ministry of Defence (MoD) could prove to be much worse than originally feared.

Armed Forces minister Bob Ainsworth told parliament that the portable hard drive reported missing by subcontractor EDS could contain data on as many as 1.7 million prospective recruits.

Ainsworth's estimate is far higher than those originally given for the loss. Officials had placed the potential tally at a modest 100,000 records.

The details reportedly include information on bank accounts, next of kin and National Insurance numbers.

Ainsworth said that the problem is exacerbated by the fact that the drive is believed to be unencrypted, allowing anyone to access the records.

The news will further infuriate MPs who had expressed outrage at the initial reports of the data loss.

Officials were already calling for new regulations in the wake of the incident, blasting what one official referred to as the "reckless approach this government takes with our personal information".

The incident is the latest in an series of embarrassing data losses for the UK government, and comes just weeks after the MoD admitted to the loss of three hard drives carrying details of at least 50,000 members of the RAF.

It could be the MoD's worst breach since January, when information on some 600,000 recruits was lost.