In a letter to ministers, written last year and released under the Freedom of Information Act, DoH director of IT implementation Richard Jeavons argued that disciplining offences was the 'responsibility of individual organisations'.
'Officials advise against starting a new national data collection where we may be required to publish, justify and explain the action taken,' he wrote.
Instead, he proposed requiring NHS bodies to publish such details in their annual reports.
Helen Wilkinson, national coordinator of the Big Opt Out patient confidentiality campaign, criticised the move for making it harder to identify security risks.
'I would like to know which NHS organisations are losing data,' she said. Despite DoH fears over the security risk posed by GPs, she said: 'It seems to be the bigger NHS organisations that are the worst culprits.'
Professor Ross Anderson, chairman of the Foundation for Information Policy Research, said he was unsurprised that ministers had blocked the move. He added: 'It would be too embarrassing, wouldn't it?'