The Home Office said a computer memory stick containing information on around 10,000 prolific offenders had been lost by a contractor.

PA Consulting warned the department on Monday that it may have lost the stick – which also contains data on all 84,000 prisoners in England and Wales – and last night the Home Office admitted it was missing.

A spokeswoman said: "We have been made aware of a security breach at the offices of an external contractor involving the loss of personal information about offenders in England and Wales.

"A full investigation is being conducted. Police and the Information Commissioner have been informed."

The spokeswoman also said the stick included information from the Police National Computer of around 30,000 people with six or more convictions in the last year.

Opposition parties described the loss as a "massive failure of duty" and accused the Government of being unable to keep any information safe.

Shadow Home Secretary Dominic Grieve said taxpayers would be "absolutely outraged" if the loss led to big compensation payouts to criminals.

Mr Grieve said: "This is a massive failure of duty.

"What is more scandalous is that it is not the first time that the Government has been shown to be completely incapable of protecting the integrity of highly sensitive data, rendering them unfit to be charged with protecting our safety.

"The British taxpayer will be absolutely outraged if they are made to pick up the bill for compensation to serious criminals."

And Liberal Democrat leader Nick Clegg argued the loss was evidence that the Government could not be trusted to run an ID cards scheme.

Mr Clegg said: "Charlie Chaplin could do a better job running the Home Office than this Labour Government."

Last November, Chancellor Alistair Darling revealed that the details of 25 million individuals had been lost when discs containing child benefit data went missing in the post.

In December, Transport Secretary Ruth Kelly told MPs that information relating to three million learner drivers had been lost when a hard drive was stolen in Iowa. Later that month HM Revenue and Customs admitting losing the details of 6,500 private pension holders. This year the Ministry of Defence said more than 100 memory sticks and 650 laptops had been lost or stolen since 2004.

Nobody from PA Consulting was available for comment. It had the data as part of research on the criminal justice system.

In 2004, it won a two-year contract worth around £19m to work on the ID cards programme – working on design, feasibility testing and procurement.

Scotland Yard has been called in, but the loss is not being treated as a crime.