Defence Secretary Des Browne has launched an official inquiry into military security after the loss of a Royal Navy laptop containing the personal details of 600,000 people.
Browne also revealed that two other laptops had been stolen, one in Manchester in October 2006 and one in Edinburgh in December 2000, neither of which were brought to light until now.
Shadow Defence Secretary Dr Liam Fox said: "In many ways this is worse than the loss of the child benefit records because we know this fell into criminal hands."
Data security firms have also slammed the government over yet another loss of data, pointing out that the information could have been protected in a number of ways.
Joe Fantuzzi, chief executive at security firm Workshare, believes that UK citizens should be given a timeline for tackling data breaches, which continue to put people's identity and privacy at risk.
"The latest data breach which has resulted in the loss of MoD data affecting 600,000 people is shocking," said Fantuzzi.
"After the HMRC scandal we would have thought that the government would put safeguards on information such as passport details, National Insurance data and NHS numbers with more care."
Fantuzzi added that the government continues to come under fire for information loss, but appears reluctant to introduce data breach regulation which would result in more punitive measures for such serious losses of data.
Jamie Cowper, director of marketing in EMEA at PGP Corporation, warned that policies, procedures and training will take time and money to implement, and that laptops will continue to be lost.
"Organisations must make it an absolute priority to start proactively defending electronic information now," he said.
Alan Bentley, EMEA vice president of Lumension Security, agreed that educating employees over the risks of data theft needs to be tackled.
"At the heart of all the recent data losses is a lack of awareness and coherence in security policies," he said.
"The 'human factor' is often the weakest link in any security armour and the MoD is no exception to this rule. The laptop stolen on 9 January failed to meet the specific requirements of its security policy, i.e. to encrypt data carried on laptops."
Bentley warned that organisations holding sensitive data should lock down their databases so that employees cannot download data onto mobile devices and take them off the premises.
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