The government says it is "carefully considering" the judgment by the European Court of Human Rights that holding DNA data on innocent people is "unlawful".
Yesterday's unanimous decision by 17 judges stated that keeping the information "could not be regarded as necessary in a democratic society".
Home Secretary Jacqui Smith said she was "disappointed" by the decision, and said the existing law will remain in place for the time being.
The decision to uphold a complaint by two Sheffield men about their DNA being kept on the controversial DNA database, despite not being convicted of an offence, is a blow to the government. The current policy is to keep the DNA of anyone who is arrested for a recordable offence.
Smith said, "DNA and fingerprinting is vital to the fight against crime, providing the police with more than 3,500 matches a month.
"The government mounted a robust defence before the court and I strongly believe DNA and fingerprints play an invaluable role in fighting crime and bringing people to justice.
"The existing law will remain in place while we carefully consider the judgement."
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The UK government's new proposals on rules for its DNA database still do not meet the requirements set by European authorities, says a human rights watchdog.