The information watchdog said last night that new powers promised to him by the Prime Minister were not enough to tackle data breaches.

Richard Thomas’s demand for more sweeping powers came as it emerged that he cannot prosecute Revenue & Customs for losing the details of 25 million Britons. He wants significant security breaches of data protection rules to be a criminal offence.

The sense of crisis gripping the Government became clear when The Times learnt that Mr Thomas, the Information Commissioner, was told only an hour before an announcement by the Prime Minister that he was to be given new authority to carry out “spot checks” on government departments. Less than a month ago, the Government rejected calls to grant him additional powers, telling a House of Lords committee that “the current enforcement regime for data protection is fit for purpose”.

Mr Thomas is demanding powers far wider than simply carrying out “spot checks”. A spokesman said: “We want powers to carry out full audit and inspection powers, not just in Government departments but in local government and private companies.”

Mr Thomas also wants the power to mount criminal prosecutions when serious breaches of data protection laws occur, such as the child benefit fiasco. At present he can issue only an enforcement notice, which results in a prosecution if an organisation fails to comply. Most prosecutions take place in magistrates’ courts, where the maximum fine is £5,000, rather than in the Crown Court, where an unlimited fine can be imposed.

Mr Thomas said: “It is important that the law is changed. to make security breaches of this magnitude a criminal offence. Making this a criminal offence would serve as a strong deterrent and would send a very strong signal that it is completely unacceptable to be cavalier with people’s personal information.”

The crisis has bolstered opponents of the proposed £5.6 billion identity card scheme, with Labour MPs calling for a halt to the project. Karen Buck, Labour MP for Kensington North, a member of the Commons Home Affairs Committee, said: “The worst thing in the world would be to plough on until we have had a chance for proper reflection.”

Pressed by David Cameron at Prime Minister’s Questions, Gordon Brown said that the introduction of the ID card would make people more, not less, safe. “People will feel confident that their identity is being protected,” he said.

Home Office officials later emphasised that information for the scheme would be held on three separate Government databases, rather than a single, newly created register. “Even if someone was able to get hold of your biographical information, names and addresses and date of birth, it will be more difficult to use as the biometric element, the bit of information unique to you, will be unusable by them,” a spokesman said.

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