A Times opinion poll released today found that voter's confidence in the government's ability to handle economic problems had halved in two months, while the government's handling of confidential information had been "profoundly shaken" in the wake of the loss of 25m unencrypted records.
Meanwhile, the HMRC has been accused of employing cost-cutting measures in the run up to the scandal.
Email records released by the National Audit Office show that HMRC management was concerned back in March about "additional costs" incurred in the handling of sensitive data, prompting criticism from Vince Cable, acting leader of the Liberal Democrats, that the government had been putting "cost cutting ahead of security".
According to reports in the Daily Telegraph, the loss of the records, which may now cost the government millions of pounds in preventing potential fraud cases, could have been averted had confidential records of people's bank account details been removed from the computer discs for £5,000.
The Conservatives have also attacked Chancellor Alistair Darling's Treasury, with shadow chancellor George Osbourne telling the BBC that the HMRC emails were evidence of "systematic failure" within the department.
Paul Gray resigned as head of HMRC on November 21 to be replaced by Dave Hartnett, the department's head of business taxation who is now acting chair.
It is understood the 25m lost records, containing child benefit data, contained on two CDs were sent by a 23-year-old junior official at HMRC earlier this month by a TNT courier service, but no records exist of them being either sent or received.
Cable said: "IT experts point out it is possible to strip out data for a modest sum but the government's short-sightedness has led to millions of personal details getting lost in the post. This is simply unacceptable."
Osbourne said: "Alistair Darling has some very, very serious questions now about the version of events that he gave earlier in the week where he implied it was just some lowly official sitting by themselves at a computer. This is now what these [subsequent] emails reveal."
Following the admission, the Information Commissioner's Office was granted stronger powers to combat breaches of data protection laws by the public and private sectors having previously had those requests rejected last month.
The new powers mean the ICO can now perform spot checks on government departments on their data security. Richard Thomas, the Information Commissioner, has said he wants these powers extended to local government departments and private companies.