Downing Street has described the loss of data from a Ministry of Defence computer hard drive, which contained the private details of armed forces personnel, as "regrettable".
"The MoD police are currently investigating this regrettable incident and will take any appropriate action," a spokesman for Gordon Brown said.
The portable drive is believed to contain more than 1.5 million bits of information, including the names, addresses, passport numbers, dates of birth and driving licence details of around 100,000 serving personnel across the army, navy and RAF, as well as their next-of-kin, an MoD spokeswoman said.
It also has data on 600,000 services applicants and the names of their referees.
Officials were "not ruling out" the risk that bank account details of personnel were held on the drive, which belonged to its IT contractor, EDS.
The department said it learned of the loss on Wednesday during a routine priority audit carried out by the contractor, and MoD police were investigating.
It is not yet known whether the drive was stolen and the MoD has been unable to confirm whether the information contained on the drive was encrypted.