Courts will get powers to hand out jail sentences of up to two years to people who trade in or deliberately misuse other people's personal data.

The announcement from the Department for Constitutional Affairs follows the reports, What Price Privacy, and What Price Privacy Now? given by the Information Commissioner to the Government.

Following consultation it was felt the current penalty of fines under the Data Protection Act (DPA) 1998 was not a sufficiently strong deterrent to stop the apparent growth in the illegal trade of personal data.

Section 55 of the DPA makes it an offence to sell or offer to sell personal data which has been (or is subsequently) obtained/procured knowingly or recklessly without the consent of the data controller.

Currently under section 60 of the DPA, anyone found guilty of breaching the Act will on summary conviction face a fine not exceeding the statutory maximum of £5,000. People accused of more serious cases under the DPA heard in the crown courts face an unlimited fine on conviction on indictment.

The Government will now amend section 60 of the DPA to allow for jail terms, in addition to the current fines. When this is completed, those who deliberately breach this law will on summary conviction in a magistrates court face up to six months imprisonment (increased to twelve months imprisonment in England and Wales when section 154 of the Criminal Justice Act 2003 comes into force).

If the breach is deemed especially serious it will be passed on to the Crown Courts for trial and conviction on indictment, would result in a term of up to two years imprisonment.

Lord Falconer, Secretary of State for Constitutional Affairs and Lord Chancellor, said: "We are determined to do all we can to stamp out this intrusive and illegal trade.

"People have a right to have their privacy protected from those who would deliberately misuse it and I believe the introduction of custodial penalties will be an effective deterrent to those who seek to procure or willfully abuse personal data.

"Greater data-sharing within the public sector has the potential to be hugely beneficial to the public and is wholly compatible with proper respect for individuals' privacy. One of the essential ways of maintaining that compatibility is to ensure the security and integrity of personal data once it has been shared."

The Government will introduce this amendment when Parliamentary time allows.