MPs have recommended that those guilty of the repeated or reckless loss of personal data should be subject to criminal proceedings.

Members of the Justice Select Committee set up following the recent high profile data breaches suggested that the laws should be expanded to offer more penalties for lax security in back-up systems.

The need for changes to legislation was highlighted by committee chairman Alan Beith, who said in a statement: "The scale of the data loss by government bodies and contractors is truly shocking but the evidence we have had points to further hidden problems.

"It is frankly incredible, for example, that the measures HM Revenue and Customs has put in place were not already standard procedure."

Currently, both private businesses and government departments cannot be punished under criminal law for reckless data breaches, but Mr Beith advocated tougher laws to act as a deterrent.

In addition, it was suggested that a closer eye is kept on all users of large resources of private information through spot checks to ensure the public are adequately protected.