There have been warnings the taxpayer may face a multi-million pound bill after the loss of a computer disc carrying personal details of thousands of employees of the National Offender Management Service (NOMS), who may include many prison officers.

Justice Secretary Jack Straw 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.

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. Some may be administrative staff.

Private contractor EDS told the Prison Service in July this year that the hard drive had gone astray. The missing disc was last seen in July 2007.

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."

The incident is the latest in a string of data losses to embarrass the Government, including the disappearance last October of two computer discs 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.

National chairman Colin Moses said: "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."

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