In the latest embarrassing security breach for Prime Minister Gordon Brown's government, "two documents which are marked as secret were left on a train and have subsequently been handed to the BBC," a Cabinet Office spokesman said.
"There has been a security breach; the Metropolitan Police are carrying out an investigation."
The spokesman declined to discuss the contents of the documents, but the BBC said they were an intelligence assessment of Al-Qaeda and an "embarrassing" appraisal of Iraq's security forces.
A spokesman for the Metropolitan Police said: "We are making inquiries in connection with the loss of documents on June 10."
Later on Wednesday evening, a Labour member of Parliament and member of the House of Commons foreign affairs committee called for an "immediate inquiry" to be set up, "leading to full disclosure of all the circumstances of this incident."
"On the face of it, this appears to be extraordinarily sloppy and indicative of poor management," said Andrew Mackinlay.
The BBC reported that the documents, in an orange cardboard envelope, were left on the seat of a train which was about to pull out of London's Waterloo station.
The broadcaster said the passenger who found the files, which it said were marked "UK Top Secret", took them to its security correspondent, who had read them.
The intelligence assessment of Al-Qaeda was seven pages long and so sensitive that it was marked "for UK/US/Canadian and Australian eyes only", the BBC reported.
The other pertained to the state of Iraq's security forces and contained "embarrassing" revelations, it said.
They had been in the possession of a "very senior intelligence official" working in the Cabinet Office, the BBC said.
It is believed they were both made by the government's Joint Intelligence Committee.
The report on Iraq was commissioned by the Ministry of Defence while the report on Al-Qaeda was commissioned jointly by the Foreign Office and the Home Office, or interior ministry.
Alex Carlile, the government's independent reviewer of terrorism legislation, said that if the reports proved correct "it suggests that someone committed an extremely serious error which should not have happened".
As the news broke of the security lapse, the government on Wednesday won a narrow victory in a parliamentary vote over widely-opposed plans to increase the amount of time that terror suspects can be held before being charged.
The government has faced a series of security gaffes in recent months.
In the most serious, the confidential records of 25 million people who receive child benefit payments went missing last year after two data discs were lost in the post.
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