Foreign prisoners should be deported or transferred to immigration centres to ease overcrowding in British jails, prison officials are expected to recommend to the Home Secretary.

The Home Office has confirmed that officials are likely to present a series of options to John Reid as the number of inmates reaches an all-time high.

They will also suggest he should relase some inmates early to free up jail space, or start making use of cells at police stations - a strategy known as Operation Safteguard.

Latest figures show the number of prisoners in England and Wales has reached 79,642, with capacity put by the Prison Service as 79,968.

The population, which was already running at record levels, rose by another 357 in the week to September 29. If that trend continues, jails could be full within days.

Rumours that Mr Reid was due to meet with the head of the Prison Service, Phil Wheatley this morning to discuss the reccommendations, were flatly denied by the prison service.

But a spokeswoman for the service pointed to announcements in July to create thousands of new prison places by building new prisons as well as expanding on existing ones.

Juliet Lyon, director of the Prison Reform Trust, said: "Faced with a crisis largely caused by successive Home Secretaries talking tough but failing to come to grips with effective prison policy, John Reid must now act decisively to divert petty offenders into enforced community work, addicts into treatment and the mentally ill into healthcare.

"Everyone knows that an overcrowded jail can do little or nothing to prevent the next victim."

An announcement on the way forward in the prisons overcrowding crisis is expected in the next few days.

The Home Secretary will travel to Luxembourg this afternoon to take part in a meeting with other justice and interior ministers from the European Union.

He has already made clear that he would like to see more foreign prisoners removed more quickly from the UK, possibly serving part or all of their sentences in their home countries.

Nick Clegg, the Liberal Democrat home affairs spokesman, blamed 'incompetence right at the top' for the crisis.

"It is a huge embarrassment for John Reid, who despite all his tough talk, has sat on his hands for nearly six months while a serious problem became an emergency," he said.

"As a result, prisons are acting as a revolving door, overflowing with thousands of repeat offenders.

"This not only creates a dysfunctional prison system, it also creates levels of repeat crime which needlessly jeopardise public safety."

Charles Bushell, leader of the Prison Governors Association, said the situation is "desperately bad".

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