The UK's MI6 had to abandon a multimillion pound covert anti-drugs operation after it lost a memory stick containing the project's top secret information.
The data was lost in 2006 by a female agent, known only as 'T', but was only confirmed by the Serious Organised Crime Agency (Soca) on Saturday.
MI6 claims that its data handling procedures have been updated and improved since the loss.
'T' had been carrying the storage device in her handbag, which she left on a transit coach in Colombia.
The loss put dozens of agents' and informants' lives at risk, and Soca had to relocate the individuals in case the device fell into the wrong hands.
Soca was given £416 million (A$856 million) in resource funding in 2006, but would not comment on how much money it lost due to the mislaid device.
"This simple act of forgetfulness with unencrypted data caused huge problems and costs for the intelligence community," said Nick Lowe, northern European head at data security firm Check Point.
"Our February 2009 industry survey showed that less than 50 per cent of UK public and private sector organisations use any form of data encryption."
A Soca spokesman said that, when the agency was set up in 2006, it was an amalgamation of a number of former agencies, and that it took a while to establish a standard data handling procedure.
He said that, since the UK government required Soca to start reporting on data losses, the agency had not suffered a single breach of personal or sensitive information.