Government officials were forced to shut down the Gateway website – which contains a range of information including tax returns and child benefit – after a memory stick with passwords and confidential information was discovered in a Staffordshire pub car park.
An inquiry was launched over the weekend while experts checked to ensure people’s private details were not compromised.
A Department for Work and Pensions spokesman said all the information was encrypted.
“We are taking this issue extremely seriously and a full and urgent investigation is under way,” the spokeswoman said.
The memory stick was lost by employee of Atos Origin, based in Cannock, which manages the Gateway system for the Government.
It was found in the car park of the Orbital Pub in Cannock.
Atos said it was clear that an employee had removed the memory stick from the company’s premises in “direct breach” of its procedures.
A spokesman said: “The company takes the loss of this device very seriously and we are currently carrying out a full investigation of both the circumstances surrounding its loss and the data content of the stick.
“Atos Origin is working very closely with the Government and the police. The company takes full responsibility for this loss and will discipline the individual involved.”
Members of the public can register on Gateway to access hundreds of services including self-assessment. tax and pension entitlements.
In a separate incident yesterday, Work and Pensions Secretary James Purnell apologised after leaving confidential correspondence on a train.