Information gathered on thousands of preschool children risks being wiped in a "catastrophic" shutdown because of problems with a $10 million education computer system.

A leaked government paper warns that the Ministry of Education's new Early Learning Information system (ELI) is struggling under the sheer volume of data, with a total freeze "likely".

"This could be quite catastrophic and incur a disaster recovery scenario, whereby databases may become corrupted and have to be rebuilt, resulting in significant data loss," the paper said. Written late last year, it warned any fixes would take as long as six months, although the Ministry of Education said this week it had already taken measures to reduce the load on the servers, and the issue was not affecting children or providers.

The revelation continues a bad week for government IT systems with payroll problems at the Ministry of Business, Innovation and Employment and another Novopay issue, this time with support staff.

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ELI was introduced in 2014 to improve information about children in early learning and help inform policy. It takes funding, attendance and personal data entered by early childhood services about the 190,000 participating children - who were all assigned a National Student Number as part of the process - and collates it for analysts to use.

The system was recently held up as a shining example by the Treasury, with a report quoting an external assessment of ELI as "very successful".

However, the issues paper seen by the Weekend Herald labelled parts of the system as "not fit for purpose".

It was extremely slow, taking up to nine hours to complete processing each night. Information provided was often incomplete, meaning ELI could not use it. To fix this, analysts were having to manually go back and redo the entries or collect extra data from the early childhood services.

All this was putting a huge strain on the server, the document said.

The Ministry of Education's head of sector enablement and support, Katrina Casey, said the paper was an internal document and had not been signed off by senior managers.

She said the risk of data loss was "extremely low" but if there was a failure it would move to its backup data centre which would ensure no interruption to service or data loss.

The ministry was working on a process of "cleansing" and reducing the volume of raw data, and enhancing the system.

"We absolutely reject any suggestion that this document represents a picture of 'severe issues with data management in ELI'," Ms Casey said. "This is exactly what you would expect in this stage of an IT project such as this."

However, the Labour Party's Chris Hipkins said: "The whole point of the new system was to make life easier yet it seems to be making things worse. It takes a special kind of incompetence to design a system that does that."

Early childhood union NZEI said the ministry should not rely on ELI data given it was not fit for purpose. Only a small amount of data has been published by ELI so far.

Govt IT problems

2012

: Education payroll system Novopay leaves teachers underpaid, overpaid or not paid at all

2012: Privacy breach at Ministry of Social Development servers means personal details of clients can be accessed through job seeker kiosks

2014: Merger of Customs and Ministry for Primary Industries' systems three years late and nearly $30m over budget

2015: Changes to child support cause $130m blowout

2016: Overhaul of police payroll and HR system blows out by over $11m