British Finance Minister Alistair Darling apologised "unreservedly" on Wednesday after admitting the government had lost the personal details of half of Britain's population.

Darling was forced to admit to parliament on Tuesday that the government's tax authority had lost data on 25 million people -- potentially the largest data security lapse in British history and one which lays those 25 million people open to the risk of identity theft and bank fraud.

"It is inexcusable, I deeply regret it, I unreservedly apologise for what has happened," Darling told BBC television.

Tuesday's admission dealt a heavy blow to Prime Minister Gordon's Brown's government, which is already being batted by criticism of its handling of Northern Rock banking debacle -- the first run on a British bank in a century.

In a round of media interviews on Wednesday, Darling sought to win back public trust by repeatedly apologising and insisting that such an enormous security lapse should never have happened and must never happen again.

Two computer discs containing information on 25 million Britons disappeared after being sent via courier from Britain's tax authority HM Revenue and Customs (HMRC).

"This is a very, very bad situation indeed," he told GMTV. "I can well understand people's anxiety and anger that this has happened. It should never have happened, and I apologise unreservedly for that."

Darling stressed that there was no evidence that the data had fallen into criminal hands, but urged Britons to keep a close eye on their bank accounts.

"The police tell me there is no evidence there has been any criminal or unusual activity," he said.

Opposition Conservatives ridiculed Darling's attempts to recover the situation and questioned his competence.

"Is he up to the job? Is this man the right person to be Chancellor of the Exchequer (finance minister)?" asked George Osborne, the Tories' finance spokesman.

"The point is that the government has failed in that first duty it offers to all of us -- to protect," he told GMTV.

Government Information Commissioner Richard Thomas said he was shocked at the scale of the security breach.

"It's almost certain that they have broken the data protection law. This is a shocking case. I'm at a loss to find out what happened in this situation," he told BBC radio.

He also said his office had been issuing warnings about data protection to organisations for years.

"We've been all the time saying that the more you are collecting personal data, for understandable reasons, the more the risks increase and the more you must be aware of what can go wrong."