There were warnings today that the taxpayer may face a multi-million pound bill after the loss of a computer disk carrying personal details of thousands of employees of the National Offender Management Service - many of whom are prison officers and probation workers.

Jack Straw, the Justice Secretary, ordered an urgent inquiry after it was revealed that the hard drive was reported missing in July. He has also demanded to be told why he was not informed immediately of the loss.

EDS, a private contractor brought in to to overhaul IT infrastructure seven years ago, told the Prison Service in July this year that the hard drive had gone astray - a year after the missing disk had last been seen.

In a statement, Mr Straw said: “I am extremely concerned about this missing data. I was informed of its loss at lunchtime today (Saturday) and have ordered an urgent inquiry into the circumstances and the implications of the data loss and the level of risk involved.

“I have also asked for a report as to why I was not informed as soon as my department became aware of this issue. My officials are also in touch with EDS as part of these processes. We take these matters extremely seriously.”

A Ministry of Justice spokeswoman added: “We believe nearly all of this data related to financial information - for example, invoices from Prison Service suppliers. However, we believe there is also a limited amount of personal information on around 5,000 NOMS employees including their names, dates of birth, National Insurance numbers and employee numbers.”

The incident is the latest in a string of data losses to embarrass the Government, including the disappearance last October of two computer disks containing personal details of 25 million child benefit claimants.

The Prison Officers’ Association said the loss, which it had not been informed about, could end up costing the taxpayer millions of pounds.

Brian Caton, the general secretary, said: “It’s absolutely abhorrent that those in authority have tried to cover it up. This serious security breach places at risk the security, safety and wellbeing of both themselves and their families.”

Colin Moses, the national chairman, added: “We are extremely concerned that not only has this data been lost, but that the Prison Service appear to have tried to conceal this serious breach in security.

“It is a breach that we believe could ultimately cost the taxpayer millions and millions of pounds, because, if the information lost is personal and sensitive, it may well mean staff having to move prisons, move homes and relocate their families. This obviously will have a significant cost to the taxpayer.

“We believe that the people who have tried to conceal this serious breach should be brought to account and we are calling on Jack Straw to fully investigate this matter and ensure that justice is seen to be done.”

Nick Herbert, the Shadow Justice Secretary, said: “The records of prisoners have been lost already and now we discover that personal data about prison officers has gone too.

“When was this incompetent Government planning to own up to another data disaster - this time one which has put the security of thousands of its own employees at risk - and if, as they claim, they didn’t know about this until now, who on earth is actually running the department?”

It was initially thought that the drive contained the names, dates of birth, National Insurance numbers and Prison Service employee numbers of 5,000 prison officers. But the Ministry of Justice later said it had established that not all those affected were prison officers, and some may be administrative staff.

The Ministry of Justice has contacted the Information Commissioner’s Office about the incident and will update Commissioner Richard Thomas on the incident tomorrow, said a spokesman.

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