The decision comes after HM Revenue and Customs lost two discs containing personal information and banking details of 25 million people.
Under current plans the ContactPoint database, which will soon hold the details of 11 million children, will be available to 330,000 government workers.
It will contain every child’s name and address, their parents’ (or guardians’) names and the GP they use. A record of government services they use will also be kept.
The database has been designed to help professionals working with the same child to get in touch with one another so that they can deliver coordinated support.
But Annette Brooke, the Liberal Democrat spokesperson for children, families and young people said the Government has proven it cannot be trusted with large databases.
“Ministers must urgently review the security of the ContactPoint database as its highly sensitive information could be extremely dangerous in the wrong hands,” she said.
“The Government has said that extra unspecified safeguards will be put in place for children of celebrities but why shouldn’t everyone enjoy this privilege?
“There could be more than financial costs if the addresses of vulnerable children from a family separated because of domestic violence, for example, are not kept secure.”
And, according to Dr Roger Morgan, the children’s rights director for England, young people have also raised concerns about the way their data will be used.
“Children want to be assured that their information will remain safe and confidential and have asked specifically that the government will never in the future put a child’s photograph or telephone number on the database,” he said.
The Government is due to announce next week who will assess the security surrounding the password-protected database.