Two computer discs holding the personal details of all families in the UK with a child under 16 have gone missing. The Child Benefit data on them include name, address, date of birth, National Insurance number and, where relevant, bank details of 25m people.

Chancellor Alistair Darling said there was no evidence the data had fallen into criminal hands - but urged people to monitor their bank accounts.

The Conservatives described the incident as a "catastrophic" failure.

In an emergency statement to MPs Mr Darling apologised for what he described as an "extremely serious failure on the part of HMRC to protect sensitive personal data entrusted to it in breach of its own guidelines".

MPs gasped as Mr Darling told them: "The missing information contains details of all Child Benefit recipients: records for 25 million individuals and 7.25 million families."

The chancellor blamed mistakes by junior officials at HMRC, who he said ignored security procedures.

"Two password protected discs containing a full copy of HMRC's entire data in relation to the payment of child benefit was sent to the NAO, by HMRC's internal post system operated by the courier TNT. The package was not recorded or registered. It appears the data has failed to reach the addressee in the NAO.

The police tell me that they have no reason to believe that this data has found its way into the wrong hands. The police are not aware of any evidence that it has been used for fraudulent purposes or criminal activity."

The data was sent on 18 October and senior management at HMRC were told it was missing on 8 November and the chancellor on 10 November, said Mr Darling.

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The prime minister's official spokeswoman said Gordon Brown has "full confidence" in Mr Darling. She added that Mr Darling has not offered to resign.