Bolton Council is under investigation after files containing children’s details were stolen.
It is understood the documents were taken when a member of staff who works with children had their car broken into.
However, it is also believed the files should not have been removed from the office by the worker, who has now left the council.
Council bosses informed parents of the children as soon as the alleged data protection breach was discovered and voluntarily referred the matter to the Information Commissioner’s Office.
A spokesman for the Information Commissioner’s Office said: “We have recently been informed of a possible data breach which may involve Bolton Council.
“We will be making inquiries into the circumstances of the alleged breach of the Data Protection Act before deciding what action, if any, needs to be taken.”
A council spokesman added: “We take our responsibilities under the Data Protection Act very seriously having in place robust procedures to meet our obligations.
Any breach is dealt with in accordance of these procedures.
“In this situation we made it our priority to speak to those people potentially affected by the breach the following working day.
“We made them aware of the situation and reassured them that we were investigating thoroughly.
At the same time we also voluntarily chose to alert the ICO of the situation and will take their recommendations on board, should there be any.”
The ICO has the power to issue a £500,000 fine for serious breaches of the Data Protection Act.