The Ministry of Defence (MoD) is investigating claims that British Telecom (BT) might have 'compromised' national security by handing its entire client database, known as Customer Service Systems (CSS), to a tiny Doncaster-based computer company.

The case has also prompted concerns at the British Bankers' Association. Fears that the banking system could have been put at risk had come up at recent meeting, said a BBA spokesman.