The government's controversial plans for ID cards will be reviewed in the light of the loss of 25 million people's personal data.
Data protection minister Michael Wills told MPs and Lords it was inevitable the government would have to review plans for a nationwide identity database.
He was reporting to the parliamentary committee on human rights a week after it emerged HM Revenue and Customs (HMRC) has lost two computer discs containing personal information of child benefit claimants.
Mr Wills told the committee: "We are going to obviously have to look at the national identity register in the light of all this.
"We are going to have to learn the lessons. Everything will have to be scrutinised and then we will assess it again."
However, he denied the data breach meant the government would be forced to abandon the ID card scheme, which is opposed by both the Conservatives and Liberal Democrats.
Quizzed on the HMRC data security lapse, Mr Wills said he had only been made aware of the missing discs after Alistair Darling's official statement to MPs last Tuesday.
He added he had thought this "perfectly reasonable", despite the chancellor being informed on November 10th.
The data protection minister said: "I would expect.the responsible ministers first of all to discover the extent of the problem; and then do whatever they could to put the problem right immediately."
Nevertheless, committee chairman and Labour MP Andrew Dismore said it was "very surprising" Mr Wills had not been told earlier.
Mr Dismore said: "If the private sector had done what the government has done they would have been had for breakfast."
The committee said the published email exchange between HMRC and the National Audit Office made it clear staff had been motivated by cost considerations when deciding not to remove sensitive data.
Mr Wills revealed he had prior suspicions the data laws needed "toughening up". He told the committee he had been concerned about the way Whitehall departments share data.
But he said he was not aware of any further data breaches, despite media speculation.