The government was forced to close down its Gateway site following the loss of a memory stick.
The Gateway site allowed people to register for tax forms and benefits and the stick was lost by an employee of Atos Origin, and later found in a car park in Cannock, Staffordshire.
The company said the employee had broken company rules by removing the memory stick from its premises. The site was restored yesterday after it became clear that the user names and passwords of 11 individuals on the memory stick were encrypted, while the site's security had not been compromised.
A spokeswoman for the Department of Work and Pensions said: “We are taking this issue extremely seriously and a full and urgent investigation is under way. We have moved immediately to make sure there is no conceivable risk to users of the Government Gateway, and are convinced the integrity of the Government Gateway has not been compromised.
“On the basis of an initial examination of the contents of the memory stick, it is our experts' opinion that the contents would not allow anyone to breach the very strong security safeguards protecting the website.”
Prime Minister Gordon Brown said the company would have ‘to explain itself'. He has also instructed Cabinet Secretary Gus O'Donnell to send out fresh instructions to ministers over how sensitive data must be handled following Work and Pensions Secretary James Purnell issuing an apology on Saturday after he left confidential ministerial correspondence on a train.