Investigation: Flamboyant City tycoon Jon Moynihan who runs PA Consulting, who are the subject of an investigation because of the lost prisoner secrets

The missing computer memory stick containing personal data on every prisoner in England and Wales may have been accidentally thrown into a waste bin.

Senior Whitehall officials admitted last night that the two-inch long flash drive is unlikely ever to be found.

They fear that the stick, containing the names and addresses of all 84,000 convicts in English and Welsh jails, was removed with the rubbish from the London offices of PA Consulting.

The Mail on Sunday has established that the data was lost by a middle-ranking woman consultant at the firm’s Victoria offices who had attended regular meetings at the Home Office with senior Government officials over the past month.

The woman has been suspended while the Home Office, Scotland Yard and her bosses hunt for the stick, which was downloaded from an encrypted Home Office file.

Last night Home Secretary Jacqui Smith was under increasing pressure to personally explain why the public was not told about the fiasco until Thursday – four days after the data was reported lost.

Ms Smith yesterday remained at her constituency home at Redditch, Worcestershire, leaving it to junior Minister Tony McNulty to try to explain why the blunder had occurred despite Government promises of a crackdown after a string of similar data losses.

Shadow Home Office Minister David Ruffley said: ‘Ms Smith doesn’t understand that the buck stops with her as Home Secretary.

Wealth: The Chelsea townhouse that John Moynihan lives in with his wife Patricia which cost them £8 million in 2000

It simply isn’t good enough to send her junior Ministers out to face the music.’

Asked why the Home Office had not sacked PA Consulting, Mr McNulty said even though there had been a ‘clear security breach’, an investigation launched into the loss had to be allowed to ‘take its course’.

PA Consulting is at the heart of the Government’s controversial £20billion ID-card project and has been paid £240million for its work in Whitehall over the past four years.

The £500,000 contract for tracking prisoner details, during which the data was lost, has been suspended by the Home Office, which is allowing no more data exchanges with the firm until an investigation into the lost memory stick is complete.

PA Consulting has earned £100million in the past three years from the Home Office ID card scheme, £33million working on new biometric visas for the Foreign Office and at least £31million from the Department for Work and Pension.

It has also received £20million from the Department for Communities and Local Government, £16million from the Environment Department, £17million from the Ministry of Defence, £9million from the Education Department and £3.5million from the Cabinet Office.

Two years ago, PA Consulting donated £11,750 to the Labour Party.

It is run by flamboyant City tycoon Jon Moynihan, 60, who lives with his hat designer wife Patricia Underwood in a Chelsea townhouse that was bought for £8million in 2000 and is now reputedly one of the most expensive properties in London.

They also have a home in New York.

PA Consulting first told the Home Office it had lost the data on Monday afternoon.

But a senior Home Office source claimed there was a suspicion that the company had been made aware of the loss the previous week.

When told of the loss, one Home Office official said: ‘You’ve done what?’ amid scenes described by a source as ‘chaotic’. The Home Office told the firm to ‘turn its building upside down’ and find the data stick.

By Wednesday, PA Consulting, under pressure from the Home Office, was forced to call in Scotland Yard’s Specialist and Economic Crime Command to investigate.

After meetings with company officials, the officers decided it was unlikely a crime had been committed or that the data had been deliberately removed from the building and they decided it did not warrant launching a formal investigation.

Late the same day, a Home Office whistleblower told the Tory Party about the blunder.

Recent Government data losses include 658 laptops stolen from the Ministry of Defence in the past four years, a personal computer containing sensitive documents relating to defence and extremism stolen from Local Government Secretary Hazel Blears’ constituency office and two discs containing 25 million child benefit records belonging to HM Revenue & Customs going missing.

Last night, the Tories demanded that the Government create a new criminal offence of ‘knowingly or recklessly causing the loss of data’.

Shadow Justice Secretary Nick Herbert said: ‘Every time the Government have lost data, Ministers have promised a crackdown – but nothing has happened.’