A highly confidential Home Office disk was found hidden in a laptop computer sold on eBay.
Engineers found the CD hidden under the keyboard
The CD was found between the keyboard and circuit board of the laptop by computer repair technicians in Westhoughton, near Bolton.
Technicians at the shop called police who sent around anti-terrorist officers to confiscate the machine, which had been bought in good faith.
The Home Office said investigations were under way into the incident.
The laptop had been taken into the Leapfrog Computers store by a customer who bought it on the internet auction site.
When engineers took off the keyboard they found a CD marked "Home Office - highly confidential".
Managing director Lee Bevan said: "I thought it was a spoof at first - I just figured someone was having a joke."
Mr Bevan said he thought it was joke to start with
Mr Bevan put the disk into the drive to check it and found it was encrypted.
"It also said, 'If found please return'. I thought, 'That's a funny thing to have on there,' but there you go."
Officers from Greater Manchester Police took the laptop and disk away but have now concluded their investigation.
A Home Office spokesman said: "Both the laptop and the disk were encrypted, thus safeguarding any information that might be stored on them.
"Investigations are now under way. It would be inappropriate to comment further while they are ongoing."
The incident follows a number of embarrassing losses of information by government departments in recent months.
HM Revenue and Customs mislaid 25 million child benefit claimants' details in the post, thousands of learner drivers had personal data lost by a DVLA contractor and a Navy laptop with details of Armed Forces applicants also went missing.