Jacqui Smith, the home secretary, was today accused of being worse than "the Keystone Cops" at keeping data safe following the loss a memory stick containing the sensitive personal data of thousands of persistent offenders.

The Liberal Democrat leader, Nick Clegg, made the accusation after it was revealed that the stick containing three sets of information from the J Track system - the cross-government electronic system for monitoring offenders - had been lost by an external contractor.

The Tories and the Lib Dems both urged the government to reconsider its plan for the introduction of an ID card database following the incident. PA Consulting, the contractor that lost the data, has also worked on the ID card project.

The missing data included the names, addresses and dates of birth of around 33,000 offenders in England and Wales, with six or more recordable convictions in the past 12 months on the Police National Computer. Also lost were the names and dates of birth, but not addresses, of 10,000 prolific and other priority offenders, and the names, dates of birth and, in some cases, the expected prison release dates of all 84,000 prisoners held in England and Wales.

Data from the Drug Interventions Programme was also on the stick, but only offenders' initials were included, not their full names.

Clegg said today: "I'm just gobsmacked, like everyone else is, that the government can be so systematically incompetent in failing to keep our data safe.

"Frankly the Keystone Cops would do a better job running the Home Office and keeping our data safe than this government, and if this government cannot keep the data of thousands of guilty people safe, why on earth should we give them the data of millions of innocent people in an ID card database?"

Dominic Grieve, the shadow home secretary, said: "The public will be alarmed that the government is happy to entrust their £20bn ID card project to the firm involved in this fiasco, at a cost of millions of pounds to the UK taxpayer.

"This will destroy any grain of confidence the public still have in this white elephant and reinforce why it could endanger - rather than strengthen - our security."

Smith was informed of the loss on Tuesday. Today she described the loss today as "completely unsatisfactory", saying the information should not have been downloaded on to a memory stick.

"This was data that was being held in a secure form, but was downloaded on to a memory stick by an external contractor," she told the BBC.

"It runs against the rules set down both for the holding of government data and set down by the external contractor and certainly set down in the contract that we had with the external contractor."

Scotland Yard said last night it had not launched a formal investigation, but was helping the contractor, PA Consulting, to "review the circumstances of the loss of data".

The J Track system was developed for the Home Office by PA Consulting and installed in 2004. The government said the transfer of data to the contractor had now been suspended. A Home Office source said the contractor's premises had been searched and officials were viewing CCTV footage.

The prisoner information is highly sensitive because if it falls into the wrong hands it could leave some criminals with spent convictions open to retribution at the hands of victims, raising the possibility of the government being sued.

David Smith, the deputy information commissioner, said that "searching questions" would have to be answered about how the information was protected. "It is deeply worrying that after a number of major data losses and the publication of two government reports on high-profile breaches of the Data Protection Act, more personal information has been reported lost. The data loss ... reinforces the need for data protection to be taken seriously at all levels."

The incident is the latest in a series of disturbing security breaches, after the high-profile loss last November of two CDs containing child-benefit details - the personal details of almost half the UK population.

In the nine months since, top secret files on al-Qaida and Iraq's security forces were found on a commuter train and handed in to the BBC by a member of the public, followed a few days later by a second batch of files on terrorism being found on a train.

Keith Vaz, the chair of the home affairs select committee, said today that it was "deeply disappointing that a loss of this kind had happened yet again".

Vaz said that Home Office ministers had previously given "absolute assurances" that data-protection blunders would not happen again and that lessons had been learned.

He told BBC Radio 4's Today programme: "What is also worrying is that a separate organisation was involved in looking at this data.

"One would expect the Home Office to have this data but if you hand out memory sticks almost like confetti to companies that are meant to do research for you, then you need to be absolutely certain that when you give such information away, the company concerned ... have put into practice procedures that are just as robust as the procedures that I hope the government has followed since the loss of the child benefit [discs]."

Vaz said the implications of the loss of prisoner data were "very, very serious indeed".

He added: "I've written to Jacqui Smith today to say I am deeply disappointed with what's happened in the view of what ministers have said to the select committee."

Welsh Conservative MP David Davies, a member of the home affairs select committee, said that the loss of the data was "disastrous".

He told Today: "One of the problems is that it is very hard to get rid of people who are not doing their jobs properly.

"Once you get into the government civil service, you're virtually unsackable no matter how incompetent you actually are."

Davies said that nothing had changed since John Reid, the then-home secretary, declared the Home Office "not fit for purpose" more than two years ago.

Davies added: "I think Jacqui Smith is going to have to do a lot of explaining to the home affairs select committee when we go back in October."