Sending out letters apologising to members of the public for losing their personal data cost the government £2.25 million, leading to further criticism.

The Taxpayers' Alliance suggested that the decision to send out letters to 25 million people affected by the recent HM Revenue and Customs data breach was "impossible to make up".

Matthew Elliott, the campaign group's chief executive, said: "The incompetence displayed by HMRC and the government is staggering.

"Not only have the security and savings of millions been put at risk, but the taxpayer has been left to foot a massive bill for botched attempts to limit the damage."

This view was supported by Lib Dem councilor for Newcastle, Greg Stone, who told Journal Live that the entire saga had been "a very sorry state of affairs".

However, an HMRC spokesman defended the decision to send out apology letters as "clearly the right thing to do" due to the extremely serious nature of the data breach.

With data security a hot issue following the series of high profile security failures in recent months, the mailing costs incurred by HMRC will likely be a further incentive for firms to shore up their own protection methods.