A series of catastrophic data leaks has caused the clampdown, after growing fears about the amount of personal data being lost by government employees.
The move is likely to lead to a boom in sales of encryption technology.
Cabinet Secretary Sir Gus O'Donnell said in an email to top civil servants on Monday: "From now on, no unencrypted laptops or drives containing personal data should be taken outside secured office premises.
"Please ensure that this is communicated throughout your organisation and delivery bodies and implemented immediately, and that steps are taken to monitor compliance."
The move will cause considerable disruption in the Civil Service as encryption is relatively uncommon in government systems.
"It is not a technical problem at all, as it is really very simple to use encryption," said John Dasher, director of product marketing at encryption firm PGP.
"Once you have the policy in place, the workforce adjusts. The problem is that too many people think that losing data could not happen to them."
UK blocks government laptops from leaving the building
By Iain Thomson on Jan 24, 2008 10:36AM