A survey of nearly 100 health authorities and trusts revealed a catalogue of information disclosures that infringed privacy.
One fax containing patient information ended up in a car distribution showroom; one senior manager learnt by mistake that a 'close relative' had an abortion and information about a hospital chaplain needing treatment at a clinic for sexually transmitted diseases had been disclosed.
In another incident an NHS worker had looked up medical details of her boyfriend's ex-girlfriend.
The BMA and other professional health care bodies are frustrated at Department of Health inaction, despite promises to produce regulations.
Increased use of computers and faxes all encouraged 'information creep' from one data information system to another, Dr Fleur Fisher, head of the BMA ethics division, said.
Geoffrey Robertson QC, who has helped to draft the proposed Bill, 'Governing Use and Disclosure of Personal Health Information', said British law was glaringly defective in providing rights protection to individuals over their personal privacy.
He said it was bizarre that while the Princess of Wales attempted legal action over newspaper photographs of her at a gym, she would have no remit at law if 'X-rays of her pelvic area' were circulated in the NHS.
He said that Britain was in breach of article eight of the International Convention on Human Rights, which covers the disclosure of personal and medical information.
NHS organisations are supposed to maintain 'safe havens' where personal information is kept confidential.
Yet a quarter of health authorities and one-third of trusts did not limit access to these files. More than half had not circulated any policy information regarding the system.
Many senior managers agreed that guidelines fell short of providing patients with protection. John Dicker, information manager at Rotherham District Health Auth ority, said he believed faxes should be banned for some types of NHS information.
The draft Bill sets out the principle that patient information should not be disclosed and then gives details of special circumstances under which circulation of information would be admissible. Unlawful disclosure would be a sackable offence.
The BMA wants wide consultation and debate on its proposed Bill.
Tom Sackville, parliamentary secretary for health, promised last night to issue the department's own draft guidelines as soon as possible.