Connecting for Health, the NHS agency behind the troubled National Programme for IT, is to purchase 700,000 encryption licences for its desktop PCs, laptops and smartphones.

The encryption software, which will be provided by McAfee, should help limit the impact of any further data loss.

"Protecting patient data and NHS operational data against data security threats is essential," said Mark Ferrar, director of infrastructure for CfH. Ferrar added that the McAfee deal went through at "a price that represents exceptional value for the taxpayer".

Like other government organisations, the NHS has not been immune to data leakage. Personal details on around 180 staff from Leicester, including banking information, were found in a street in Stevenage, Hertfordshire, in March this year.

Stockport Primary Care Trust lost 4,000 personnel details when a member of staff dropped a USB stick in January.

But those losses are small compared with the 168,000 records lost by NHS Trusts which were reported last Christmas Eve.

Parts of the National Programme for IT are now running four years behind, according to a report issued last week by the National Audit Office. The estimated cost of the project now stands at £12.7bn, double its original estimate, the NAO found.

The Ministry of Defence announced last Wednesday that it was encrypting the data on 20,000 of its laptops using software from McAfee rival BeCrypt.