A "clear breach" of security rules led to secret documents relating to al-Qaeda and Iraq being lost, Cabinet Minister Ed Miliband has told MPs.
An unnamed Cabinet Office employee was suspended after the documents were left on a train seat and handed to the BBC.
Mr Miliband said the official was not authorised to remove the files from government premises, but national security did not seem to be "at risk".
Earlier, Gordon Brown said the loss of documents had been "very serious".
In a statement to the Commons, Mr Miliband said former Permanent Secretary for Security and Intelligence Sir David Omand will carry out a full investigation of the circumstances of the case.
'National security'
Mr Miliband said there had been "a clear breach of well established security rules which forbid the removal of documents of this kind outside secure government premises without clear authorisation and compliance with special security procedures".
"While the documents do not contain the names of individual sources or specific operational details, they are sensitive, high-level intelligence assessments," he said.
The minister, who said the police investigation was on-going, went on: "There is no evidence to suggest that our vital national security interests have been damaged or any individuals or operations have been put at risk."
"There has been a security breach, the Metropolitan Police are carrying out an investigation"
Speaking at a Downing Street press conference on Thursday, the prime minister said: "Of course we take this seriously and of course any breach of intelligence cannot be condoned.
"We will inquire and report on all the circumstances in which this happened."
Keith Vaz MP, chairman of the powerful Home Affairs select committee told the BBC: "Such confidential documents should be locked away... they should not be read on trains."
And Home Office Minister Tony McNulty told BBC News he was awaiting the results of the police investigation.
Mr McNulty said it would have been "very, very bad" if the documents had ended up on the internet.
"These documents are labelled and designated at top secret and above for very, very good reason and I think that's why we do need to get to the end and details of the breach," he said.
The minister added: "These are not documents that the government seek to hide just because they don't want the public to know about it. "
"They are documents that are operational documents that if released in that fashion would tell our enemies things that we don't want our enemies to know."
'Own goal'
Conservative security spokeswoman Dame Pauline Neville-Jones described the loss as the latest in a "long line of serious breaches of security".
Liberal Democrat home affairs spokesman Chris Huhne said the breach had been "appalling".
"It beggars belief that the government could have scored such a devastating own goal on the very day it was pushing draconian counter-terrorism laws through parliament," he added. The two reports were assessments made by the government's Joint Intelligence Committee.
One, on Iraq's security forces, was commissioned by the Ministry of Defence.
FROM THE TODAY PROGRAMME
According to the BBC's security correspondent, Frank Gardner, it included a top-secret and in some places "damning" assessment of Iraq's security forces.
The other document, reportedly entitled 'Al-Qaeda Vulnerabilities', was commissioned jointly by the Foreign Office and the Home Office.
Just seven pages long but classified as "UK Top Secret", this latest intelligence assessment on al-Qaeda is so sensitive that every document is numbered and marked "for UK/US/Canadian and Australian eyes only", according to our correspondent.
It appears that in a serious breach of the rules, the papers were taken out of Whitehall by the official and left in an orange cardboard envelope on the seat of a Surrey-bound train from London Waterloo on Tuesday.
When a fellow passenger saw the material inside the envelope, they gave it to the BBC.
Police search
Reports suggest that the unnamed official, who is described as a senior male civil servant, works in the Cabinet Office's intelligence and security unit, which contributes to the work of the Joint Intelligence Committee.
His work reportedly involves writing and contributing to intelligence and security assessments, and he has the authority to take secret documents out of the Cabinet Office - so long as strict procedures are observed.
Once the documents were reported missing, a full-scale search was launched by the Metropolitan Police, amid fears that such highly sensitive material could have fallen into the wrong hands.
Our correspondent said that across several departments in Whitehall on Wednesday evening there is said to be "horror" that top-secret documents could have been so casually mislaid.
MISSING SECRETS
The inquiry is likely to focus on the Cabinet Office, and the security procedures that made it possible for sensitive information to be allowed out of a secure environment.
A spokesman for the Cabinet Office said: "Two documents which are marked as 'secret' were left on a train and have subsequently been handed to the BBC.
"There has been a security breach, the Metropolitan Police are carrying out an investigation." The spokesman declined to discuss the contents of the documents.
One Whitehall source sought to play down the impact of the breach: "The embarrassment of the loss is greater than the embarrassment of the contents of the documents.
"We don't believe there is a threat to any individuals in what was in these documents if they had got into the wrong hands."
A Metropolitan Police spokesman said: "We are making inquiries in connection with the loss of documents on June 10."
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