Simon Watkin, who was in charge of the Home Office's High-Tech Crime Team, was closely involved in the development of a national strategy for e-crime and had a high-profile role co-ordinating computer crime policy across the department.
Watkins' sudden promotion to a non-IT related project in David Blunkett's private office leaves the crime unit without an experienced permanent chief. Some experts fear this could delay important policy work on high-tech crime.
"The concern is that the work could lose focus," said Chris Sundt, rapporteur for e-crime at IT lobby group Eurim.
"E-crime is a complicated issue. There are lots of different parts of the Home Office's remit that are affected by it in one way or another, and we need to make sure they all fit together."
The High-Tech Crime Team grew out of the Home Office's work on tackling child pornography. It now co-ordinates work by the Home Office on issues such as crime reporting, data retention and the Regulation of Investigatory Powers Act.
The unit also acts as a contact point for businesses, and has listened to their concerns about the impact of e-crime and the development of legislation.
"Simon was always a good friend to industry," said Tim Snape, a delegate on IT security at the G8 summit in Tokyo last year. "He was a good ally and ambassador for the Home Office and his contribution was valued. He always took it on the chin if the news not what he wanted to hear. He did not pass the buck."
The Home Office said it plans to replace Watkin with another person of the same seniority and will be recruiting as soon a possible.
Georgina Harrisson, who previously worked under Watkin, is understood to have been promoted to acting head of the team until a replacement is found.