The failure to check DNA data from 4,000 serious crimes abroad for more than a year was "catastrophic", Tory leader David Cameron has said.
Prime minister Gordon Brown confirmed that 11 people involved had gone on to commit offences in the UK, including assault and non-payment of fines.
In heated Commons exchanges, Mr Cameron accused the government of being "incompetent" at handling data.
The wanted individuals are linked with crimes including murder and rape.
Police in the Netherlands sent a data disc, containing DNA profiles from crime scenes, to the Crown Prosecution Service [CPS] in January last year, to be checked against the UK's database.
But the checks did not start until this month, since when 15 matches have been found.
Of these people, 11 are known to have committed offences in the UK.
During heated exchanges the Commons, Mr Cameron said: "Can the prime minister explain how such catastrophic errors of judgement took place?"
Mr Brown said the CPS had been asked to set up an inquiry.
He added: "The inquiry will cover all details of what happened. But it was only possible for the Dutch to ask us to look at our DNA records because we are keeping those records. The Conservatives opposed that legislation."
Mr Cameron asked: "Why is it that this government is so incompetent when it comes to protecting information from criminals?"
An operation involving police and the Serious Organised Crime Agency has now begun to try to locate the 15 individuals found to have been in the UK.
Liberal Democrat leader Nick Clegg said: "This is yet another example of the public having been put at risk by the slapdash way that data is handled across government departments.
"It is another hammer-blow against public confidence which has been so severely damaged over recent months by the various cases of data losses."
BBC political editor Nick Robinson said the Home Office had been told about the situation a week ago but was advised to say nothing to avoid jeopardising the police operation.
'Not security issue'
He said there was a suggestion that the information had been left in the desk of an official who was off on sick leave.
The CPS stressed there was not "a data security issue", saying: "This information was always in the possession of the CPS."
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In the private sector anyone losing data in this way would be fired on the spot
"These are profiles relating to unsolved crimes in that country. As this information necessarily relates to ongoing police investigations, it would be inappropriate to provide any more detail at this stage."
Labour's Keith Vaz, home affairs select committee chairman, said a thorough investigation was needed.
He told BBC Radio 4's Today programme: "It does raise issues about the way in which these processes work."
He added: "Of course it's unsatisfactory that an administrative error led to serious criminals not being apprehended."
Mr Vaz added that there was a need for more "checks and balances", saying: "It's very important that we make sure this is not repeated."
The incident follows a series involving data, the biggest being the loss of 25 million people's child benefit details.
Last month Defence Secretary Des Browne announced an inquiry after it emerged that a Royal Navy laptop containing 600,000 people's details had been stolen - and there had been two similar thefts since 2005.
In December it emerged that details of three million British learner drivers, held on a computer hard drive, had gone missing in the US.