Consultants who lost data are working on ID cards

The Home Office contractor which lost a computer memory stick containing the details of 84,000 prisoners is at the heart of developing the Government's controversial compulsory identity cards system.

PA Consulting – which on Tuesday told ministers it had misplaced the unencrypted names, dates of birth and expected release dates of the inmates, as well as the addresses of 33,000 prolific criminals – has won £240m of government contracts since 2004, including one as the Home Office's "development partner" to "work on the design, feasibility testing, business case and procurement elements of the identity cards programme".

The Home Office paid the firm a total of £95m between 2004-05 and 2006-07, including £25.4m to work on a national network of fire control centres. The company's consultants have also been paid more than £33m by the Foreign Office to work on biometric passports and visas.

The Home Secretary, Jacqui Smith, faced angry questions from senior MPs from all the parties, amid accusations that the blunder would further erode public faith in the identity cards project.

Conservatives and Liberal Democrats expressed grave concern about the future for ID cards yesterday in the wake of a string of data scandals. Keith Vaz, the Labour chairman of the Home Affairs Select Committee, demanded to know full details of the company's involvement in the ID cards scheme. He said MPs would grill the Home Secretary, Jacqui Smith about the latest data loss when she appears before his committee after Parliament returns in October. He warned that the affair came just months after ministers gave a "cast-iron guarantee" that no further data would be lost.

Mr Vaz said: "If they cannot handle data for 84,000 prisoners they will certainly not be able to handle it for 61 million citizens."

Dominic Grieve, the shadow Home Secretary, said: "The public will be alarmed that the Government is happy to entrust their £20bn ID card project to the firm involved in this fiasco, at a cost of millions of pounds to the UK taxpayer. This will destroy any grain of confidence the public still have in this white elephant."

Nick Clegg, the Liberal Democrat leader, added: "If the Government goes through with its plan for an ID card scheme, presumably other private companies will be given access to the personal data of everyone in the country. What will stop the data of all of us falling in to the wrong hands?"

A spokesman for PA Consulting said: "We are collaborating closely with the Home Office on this matter. We have no further comment at this time."