Data with names, dates of birth and ethnicity details about 830 pensioners went astray in June.

Council bosses claim that because it did not contain addresses or bank details, there was only a slim risk of identity fraud.

But they launched an enquiry into the blunder as soon as they discovered the disc had been lost.

And today they apologised and said it shouldn't have happened.

The disc had been sent to the council by Age Concern and the information was being used for performance indicators.

The council was supposed to return the disc to Age Concern securely but instead a worker popped it in the post and it was lost. The person who posted it has since left the council.

Sheffield Council chief executive John Mothersole said: "This breach of council procedures clearly shouldn't have happened and I apologise to Age Concern and others concerned for the fact that it did.

"The member of staff responsible, who no longer works for the council, should have agreed with Age Concern on either a secure way to return the data or that the disk should have been destroyed.

"This wasn't done and putting the disk in the post was the wrong course of action."

Mr Mothersole said the council was strengthening its data protection. He added: "Although the data involved posed an extremely low risk to potential identity fraud, this incident shouldn't have happened.

"I had already commissioned a council-wide review to strengthen our information management procedures. This breach is a loud and clear example of the need to make sure that we do all that we can to avoid such incidents happening again."

Age Concern said the council had assured it the data would be handled securely. A spokesman said: "Age Concern Sheffield shared a limited amount of personal data about the participants in the Community Link Project with the council as part of the monitoring and evaluation of the project.

"We received reassurances from the council that this data would be used only for monitoring purposes and would be handled securely. We are pleased that the council now intends to tighten its data handling procedures."

Sheffield Council joins a long list of other organisations which have lost sensitive data.

A computer hard drive with the details of 100,000 Armed Forces personnel was reported missing at The Ministry of Defence this month.

A portable hard drive holding details of up to 5,000 employees of the justice system was lost in July 2007 - a fact only discovered last month.

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