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A contractor working for the Home Office has lost a computer memory stick containing personal details about tens of thousands of criminals.
The Home Office was first told by private firm PA Consulting on Monday that the data might be missing.
The lost data includes details about 10,000 prolific offenders as well as information on all 84,000 prisoners in England and Wales.
The Home Office said a full investigation was being conducted.
They said the police and the Information Commissioner had been informed.