Ministers face embarrassment over stolen laptop and further data losses

Ministers faced further questions over data security last night after a laptop computer containing the details of 600,000 people was stolen and hundreds of documents listing personal data on benefits claimants were found dumped at a roadside.

The disclosures – three months after computer discs listing child benefit records of 26 million people vanished – left the Government facing fresh embarrassment over the security of personal data.

The laptop listed the personal information of recruits to the Royal Navy, Royal Marines and Royal Air Force, and of others who had expressed an interest in joining. It contained passport details, national insurance numbers, drivers' licence information, family details, doctors' addresses and NHS numbers.

The Ministry of Defence said the laptop was stolen from a Royal Navy officer's car parked in Birmingham on 9 January but it had decided – after consulting the police – not to disclose the theft immediately.

The ministry said it was treating the data breach with the "utmost seriousness". It was writing to the 3,500 people whose details were on the database and banks had been put on alert for fraudulent activity.

Des Browne, the Defence Secretary, will make a statement to MPs about the loss at "the earliest opportunity". Liam Fox, the shadow Defence Secretary, said: "We will want to know the specific circumstances behind this incident and what security implications there may be.

Nick Harvey, the defence spokesman for the Liberal Democrats, said: "For the details of people in such sensitive positions to vanish like this defies belief."

The theft came to light after a motorist revealed he had found hundreds of documents bearing people's personal details scattered on a roadside.

Karl-Heinz Korzenientz discovered the files on a roundabout and a road near Exeter Airport in Devon – exactly the same spot where he found similar documents at the end of last year.

He said: "If I was a criminal I would be having a heyday. It is ridiculous papers like these are so lightly lost – on two occasions."

The documents included incapacity benefit files, others relating to pensions and job seekers allowance, bank statements, passport documents and copies of passports. There were also papers relating to home loans and mortgage interest and details of national insurance numbers, addresses and dates of birth.

The Department of Work and Pensions launched an investigation, while the Tories attacked the Government for "utter incompetence". The episode adds to the pressure on Peter Hain, the Work and Pensions Secretary, who faces two investigations into undeclared donations to his failed Labour deputy leadership campaign.

The Government admitted in October it had lost the entire child benefit database when two CDs went missing from HM Revenue and Customs. Last month, Ruth Kelly, the Transport Secretary, announced the details of three million candidates for the driver theory test – including names, addresses and phone numbers – had also vanished while being processed in the US.

Simon Davies, director of the human rights group Privacy International, said he was "flabbergasted" by the laptop theft, adding: "I cannot believe that, after everything that has happened, our flagship security agency cannot get the handling of its information exactly right. The idea somebody could lose a laptop containing that information, unencrypted, is a lapse that rivals the HMRC breach."