Government unveils plans for new super-jails but thousands of prisoners will STILL get early release

Thousands of criminals should be released early because of severe overcrowding, a Government report recommends.

Lord Carter's review of the prison system, which was reported to Parliament this afternoon, also proposes that offenders who face "short" jail sentences should only be locked up if there is enough space.

The Government cushioned the blow by announcing today plans to build three "Titan" prisons - holding about 2,500 inmates each - as part of a programme to create more than 10,000 places.

However, until those prisons are built, Lord Carter recommends community sentences are used where appropriate to ease overcrowding.

Critics hammered the Government for letting the prison system become so bloated it does not have the capacity to cope.

Juliet Lyon, the director of the Prison Reform Trust, described the chaotic prison system as a "terrible mess".

Ms Lyon told BBC Radio 4's Today programme: "If that is the direction the report is going to take, it would be a recognition that we have got into a really terrible mess for a long period of time."

Shadow justice secretary Nick Herbert said Lord Carter's recommendations for urgent action were a "devastating indictment" of the Government's failure to manage the prison system.

Justice Secretary Jack Straw moved quickly to soften fears by saying an extra £1.2 billion had been secured for a building "Titan" jails.

Once the Titan jails are built it will see the capacity of jails in England and Wales increase from 81,000 to 96,000 by 2014.

One of the massive Titan jails - far bigger than any jail currently used in Britain - will be in service by 2012, with a further two expected to be built by 2014.

The plan was announced as part of a major review of the prison system, which is struggling with record levels and severe overcrowding.

Mr Straw told the Commons: "To provide additional capacity in the short to medium term we intend to convert the former Ministry of Defence site at Coltishall in Norfolk into a Category C prison."

He added that the Ministry of Justice is also "actively looking" for a prison ship.

Mr Straw also said he would change the way the controversial indeterminate sentences operate.

The so-called Indeterminate Sentences for the Public Protection, or IPPs, would be amended so they only apply to prisoners who are given a minimum tariff of two years in jail.

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The IPPs - which were only introduced four years ago - have created a massive bottleneck in the prison system because inmates handed such terms by the courts with a short tariff are often unable to complete courses required to win parole.

The proposal for Titan prisons, like the early release scheme, was put forward by Government troubleshooter Lord Carter of Coles.

He was asked by ministers to look at the way the prison system works from top to bottom.

His report recommended that ministers should use an existing process to win planning permission for the massive jails as quickly as possible.

He pointed out that officials can make an application directly to the Secretary of State in certain circumstances - a move which could avoid long-running opposition with people who attempt to block construction of a jail near their homes.

Lord Carter said it would be possible to build massive jails within four to five years, although he admitted it would be a "challenging" target.

There was a "compelling financial case" for building Titan jails so that up to 5,000 places in Victorian prisons could be closed down.

He suggested the Titans should be built in London, the West Midlands and the North West.

They should comprise five units, each with about 500 offenders in different segments.

The jails should be built using cost-effective designs which could deliver "staff savings", he added.

New technology could also be built into the fabric of the building to boost effectiveness and efficiency, Lord Carter said, such as biometric scanning, barcoding and electronic door operation.

Lord Carter added: "Demand for prison places will outstrip the rate of supply of prison places in the short, medium and long term unless immediate action is taken."

There will be a shortage of prison places of up to 3,000 by next summer and up to 6,000 in 2009, his report said.

He pointed out that Lancaster Castle Prison in Lancashire is said to be the oldest jail in Europe and that parts of Wakefield, Preston and Stafford Prisons were opened in the 1820s.