Ministers are investigating reducing the length of time that prisoners spend in jail by 20 per cent as an emergency measure to cut the total number of inmates, which yesterday reached a record 81,135.

Thousands of prisoners would be released early after serving only 40 per cent of their sentence instead of the present 50 per cent, The Times has learnt. Another possible solution is to increase the present emergency early-release scheme from 18 to 23 days.

The latest prison population figure, which includes 332 being held in police cells, comes after the Government was forced in June to announce that thousands were being freed 18 days early because the prisons were full. Numbers have risen throughout the summer, leaving only 780 free spaces.

Helen Edwards, chief executive of the National Offender Management Service, warned ministers three and a half weeks ago of the continued rise. In a note headed “The current crisis and its consequences”, Ms Edwards said: “We are facing a worsening situation. On 28th August the population reached an all-time high of 81,045 compared with a previous high of 81,040 on 29 June.”

Her note said that the service was “once again operating at the margins of capacity and the strains of the situation are showing”. Under the heading “timing”, she wrote: “Urgent – we need to be aware of the considerable risks were are running and the options available.”

Ministers are expected to resist taking a decision to allow the early release of prisoners as long as possible because of what it could do to the Government’s credibility on law and order.

Under the present rules the great majority of prisoners – other than those serving life or indeterminate sentences – are released after serving half their sentence or they become eligible for parole at that time.

Charles Bushell, general secretary of the Prison Governors’ Association, said: “We need a serious debate in our society. Are we going to lock up more people? If we are going to lock up more, are we prepared to pay the huge additional costs?”

Nick Herbert, Shadow Justice Secretary, said: “Releasing criminals early has put the public at risk and failed to make any impact on prison numbers. Jack Straw ignored this issue in his speech this week. He must now explain what he proposes to do.”

He added: “Any extension of the failing early-release scheme must be ruled out.”

David Heath, the Lib Dem justice spokesman, said: “The Government’s handling of the prison crisis has consistently been marked by a mixture of incompetence and panic measures.”

Of the 1,6325 offenders released under the 18-day early-release scheme introduce in June, 176 have been recalled to jail, including 65 for alleged reoffending. Forty-eight of those recalled are on run.

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