The Prime Minister today issued a deep apology to the public for the data protection fiasco that has seen the bank and employment details of 25 million people - including his own - lost in the post.

At a rowdy Prime Minister's Questions, Gordon Brown reiterated his Chancellor’s argument that there was nothing wrong with the HM Revenue & Customs's system to protect private information. He claimed that instead it was a case of the existing procedures not being properly followed.

Nonetheless, he announced that, the Information Commissioner - who acts as watchdog for the way personal information is handled – would be given extra powers to carry out “spot checks” of Government departments.

“I profoundly regret and apologise for the inconvenience and worries that have been caused to millions of families that receive child benefits,” Mr Brown said, as he came under furious Opposition fire over the loss.

“We have a duty to do everything that we can to protect the public.”

The addresses, birth dates, national insurance numbers and bank account details of every child benefit claimant in the country went missing when two CDs were placed in the unregistered post last month. A junior employee at the HMRC office in Tyne & Wear sent the unrecorded parcel and it has not been seen since.

David Cameron, whose details are also missing, claimed that the blunder did indeed show a system failure at the Revenue. He welcomed Alistair Darling’s admission that his confidence in the department had been shaken.

“It’s all very well to say we’ll hold an inquiry, but the Government has had ten years to sort this out,” the Tory leader said. “I have to say if a junior official in an organisation can access so much information and send it not once, twice but three times - that is evidence of systemic failure.”

The Conservative leader lambasted what he called the “bizarre” and “weird” attitude of the Government in suggesting that it could still be trusted to introduce identity card scheme.

The catastrophic breach of security led to the resignation of Paul Gray, the chairman of HMRC and the Chancellor was forced to admitted this morning that a string of blunders at the Revenue had left his own confidence in the department dented.

Yesterday’s announcement that two CDs bearing private information had been lost in the post was the latest of a series of lapses, including a similar smaller breach of data security last month and the loss of 41 departmental laptops containing sensitive information.

The Prime Minister’s response to this roll call of failures is to extend the powers of scrutiny afforded to Richard Thomas, the Information Commissioner. His department will now be able to carry out unannounced audits of information security across Government departments, currently the commission only responds to specific complaints.

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