Radical proposals to examine a US-style system of sentencing intended to control the number of offenders sent to overcrowded jails will be outlined by ministers today, The Times has learnt.

Senior judges have expressed concern that the controversial proposals to review the prison-building programme and the impact of sentencing on population could lead to curbs on their sentencing powers.

The findings of the six-month review, conducted by Lord Carter of Coles, are being published as prison numbers reach 81,455 — a record for in England and Wales. The Government hopes that his proposals will produce a long-term solution to prison overcrowding, and offer hope of stabilising the jail population.

The review is expected to recommend the examination of a US grid system of sentencing, which has the potential to severely limit judges’ discretion when handing out jail terms. Under the scheme, a sentencing commission would be created with the aim of bringing more consistency and predictability to sentences.

The commission would create a framework in which offences would be banded together by seriousness and would then be matched to guideline penalties. The intention is to help ministers to predict the costs of sentencing and match penalties imposed by the courts more closely with the resources available. It would also help to meet a key idea of Lord Carter that the judiciary has a consistent and cost-effective means of linking the sentences that they impose with the costs involved and the resources available.

Judges fear that a sentencing framework could be used by ministers to reduce sentences to meet prison budgets. It is thought that because Jack Straw, the Justice Secretary, wants to avoid a public row with the judiciary, the idea may be watered down. “Jack is not going to have a spat with the judges over this,” one senior Whitehall source told The Times. A judges’ representative was sent to the US to find out more about the system that Lord Carter has considered adopting.

Lord Carter will recommend the construction of more prisons and changes to the controversial indeterminate sentence for public protection (IPP), which was introduced two years ago and which has sent the number of people serving a life sentence in prisons in England and Wales over 10,000 for the first time.

Offenders given an IPP are told that they must serve a minimum term after which the Parole Board will decide if they can be released. If they are not freed, they remain in jail indefinitely, with reviews of their case every two years. Lord Carter is expected to recommend looking at restricting their use to only the most serious offences, or imposing a minimum tariff. The Justice Ministry is looking at the idea.

At present IPPs can be given to any offender convicted for a second time of a range of 153 crimes, including sexual assault, affray and exposure.

Lord Carter is also expected to suggest replacing old and unsuitable prisons. Prison bosses have in the past suggested selling off some of the older jails on prime sites in inner cities and replacing them with new jails, nearer to motorways, and providing smaller hostels and open prisons for low-risk offenders and women.

Senior judges have already seen a draft of the Carter report and Mr Straw is believed to sympathise with their concerns about any move that will affect their discretion. Ministers are likely therefore to play down any proposal for an American-style grid system, insisting that it would be looked at only for the purposes of research.

Lord Carter, a Labour peer who was best man at Mr Straw’s wedding, has a reputation in Whitehall as Labour’s Mr Fixit. He urged the creation of the National Offender Management Service — known in Whitehall as Nightmare on Marsham Street — which is supposed to provide the management of offenders from sentence to release.

It has had a troubled history and questions remain over whether it will survive.

Two years ago he conducted an inquiry into the burgeoning £2 billion legal aid bill, which led to controversial proposals to contract out legal aid work through competitive tender and put all lawyers on fixed fees.

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