241 Pizza

The Netherlands and Belgium are actively looking at introducing new laws that are behind spearheaded by "consumer facing government departments", he added.

By contrast, Dr Hosein said the decision to entrust data policy to the Home Office had hampered progressive legislation in the UK.

"The Home Office can only think of ID cards when it comes to information security. That is far from the best approach," he said.

Gary Clark, of SafeNet, the security company, also urged the Government to copy US rules which call for personal data held by the authorities to be encrypted.

“It needs to take legislative steps to put in place an encryption standard for all data,” he said

Mr Davies said there record of data leaks at HMRC indicated a "systemic problem" at the department.

He added: "An intelligent data thief would be able to use this information to obtain passwords and credit card numbers. This has the potential for wide and deep data theft."

There have been at least three major leaks involving HMRC in the past three months. In October a laptop containing data on up to 2,000 people with investment ISAs was stolen. In Parliamentary answers Ministers revealed that 41 laptops were stolen from HMRC in the past 12 months.

A CD carrying details of 15,000 Standard Life customers was also lost.

Research carried out suggests that before yesterday's disclosure the public already trusted the government less than private companies to look after their personal information.

A poll by Sophos, the security company, found that 33 per cent of the public trusts the public sector less than private companies - compared with 7 per cent who said that companies were less trustworthy.

Some 85 per cent of users of online government services believe that their local authority's IT systems have probably already suffered a security breach at the hands of cybercriminals. The survey, which polled 241 members of the public, also revealed that 86 per cent of users would hold the local authority itself responsible, rather than the hackers.

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