The “jail within a jail” will have its own facilities including kitchen, exercise yard and living rooms.

The Times understands that the unit will be at Woodhill jail in Milton Keynes, where four of the 13 suspects are held. Another eight are in Houseblock 4 in Belmarsh prison at Woolwich and one is in Broadmoor top-security hospital. Phil Wheatley, the new Director-General of the Prison Service, disclosed yesterday that he hoped the new unit would open in May. He said: “We have looked at the costs and space and we have found a place.”

In his first interview since taking up his post on Monday, Mr Wheatley added: “It will be a discrete facility to hold those prisoners in this group who want to be held there.”

The detainees will be offered the opportunity to be held in the unit but will not be forced to go into it. “We should not force people to go into something which they may find from their point of view less convenient than where they are currently being held,” he told The Times.

He refused to give details of the costings or the site identified for the unit, but he indicated that it would probably be outside London by suggesting that it would be less convenient for solicitors to visit.

The unit will be a secure facility within the grounds of an existing jail but it will not have the high-level security features that surrounded special secure units where senior IRA terrorists, major drug-dealers and international terrorists were held. Mr Wheatley said: “This group are not special security prisoners requiring the absolute top level of security, but it will be a small separate unit.”

Although the Prison Service will offer a range of activities in the unit, including access to long-distance learning for GCSEs, A levels and Open University courses, it will not provide the extent of activities available to all prisoners. “As soon as you produce small separate units there is a limit to the amount of choice people can get,” Mr Wheatley said. “Obviously we cannot march them out to workshops.”

He said that although none of the detainees would be forced to go into the unit, once it was established he would prefer them all be held in it.

The decision to create a special unit follows a recommendation last month from Lord Carlile of Berriew, QC. He carried out a review of the operation of powers to detain without charge suspected international terrorists and recommended detainees be held in a discrete unit in a jail.

He said that all the detainees to whom he had spoken complained that they were being locked up among convicted criminals. Lord Carlile said that people not charged with any criminal offence should be kept separate from remand or convicted prisoners and allowed greater freedom to mix.

David Blunkett, the Home Secretary, echoed Lord Carlile’s sentiments on Monday. “I have authorised that we should make such a provision available should the individual choose to take it up,” he said.

“It would not be appropriate to confine them into one area against their will.”

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