The UK's Home Secretary, Jacqui Smith, is terminating PA Consulting's Â£1.5m contract to keep track of persistent offenders in the criminal justice system and reviewing its other contracts with her department, valued at Â£8m a year.
The PA staff responsible for losing a memory stick containing the names, addresses and expected release dates of all the 84,000 prisoners in England and Wales were all sacked.
The Guardian newspaper commented, "The political embarrassment over this data loss is compounded by the fact that the company has been at the heart of developing the government's controversial identity cards project."
It is thought the stick was stolen and there are some concerns that the information could be used for revenge attacks.
This is the latest outrage in a string of widely publicised governmental data losses in the UK - the subject has become a mainstay of everyday humour.
See here for the full story.