Justice secretary Jack Straw has been accused of letting EDS get away with " a slap on the wrist" after losing a hard drive containing sensitive personal data on prison staff.

A huge row erupted when newspapers reported in September that the data had gone missing, two months after the loss, amid fears that the incident could put thousands of prison officers at risk.

In a Commons statement on the outcome of the inquiry Straw revealed that the hard drive contained bank details, addresses, National Insurance numbers and dates of birth on 256 staff, and not 5,000 as originally reported.

There is "no indication this information has entered the public domain", according to the inquiry, but no comment on whether it could be in the hands of fraudsters.

The inquiry found that the data had been transferred to the hard drive for a data recovery exercise and had not been purged afterwards.

Straw said that EDS "is taking appropriate action", including disciplinary action "if necessary", and that National Offender Management Service (Noms) staff face disciplinary action for concealing the news from ministers.

The minister claimed that EDS and Noms had been "actively improving data protection" since the incident.

Tory shadow justice secretary Nick Herbert argued that Straw had merely told EDS to try better and that he "won't treat breaches seriously".

Liberal Democrat justice spokesman David Howarth added: "It says a lot that it is considered good news when it is revealed that hundreds of people, rather than thousands, have had their sensitive personal information lost."