Senior judges have told the Lord Chancellor that the new Ministry of Justice will be unworkable without safeguards to protect their independence.

With less than three weeks until the new ministry takes effect, judges fear that placing courts and prisons in the same department, under one budget, could put them under pressure not to imprison offenders.

They fear that because of the crisis of prison overcrowding, they may be forced to tailor sentences according to available prison space. They also say that unless the budget for the courts is ring-fenced, it will be consumed by the demands of prisons and probation service.

The judges have outlined their concerns in a paper to ministers in which they say that without adequate safeguards and guarantees they would have to resort to the “nuclear option”. This would involve the Lord Chief Justice saying to Parliament that the Lord Chancellor is in breach of his statutory duties to protect the independence of the administration of justice.

“It would be most unfortunate if a stage were ever to be reached where he was forced to deploy this,” the judges say.

The Lord Chancellor, Lord Falconer of Thoroton, has set up an urgent working party chaired by Alex Allan, permanent secretary of his department, to mediate a solution.

A further concern of judges is that the new Minister of Justice — of whom the first is to be Lord Falconer — will be subject to regular challenges in the courts, particularly over prisons and penal policy.

This may compromise judges who could find themselves ruling on the prisons service and against the same minister who is in charge of their budget.

The Home Secretary, who is currently responsible for prisons, does not meet judges when he is facing judicial review proceedings in the courts, the judges say. But the Lord Chancellor is in a different position, in that he has a constitutional relationship with the Lord Chief Justice under the Constitutional Reform Act 2005 and has to be in constant dialogue over issues such as judicial appointments, discipline and the administration of justice.

Last week the Lord Chancellor told the Constitutional Affairs Select Committee that he took the judges’ concerns “very seriously” and that they were looking at ways to protect the budget.

He indicated that progress had already been made through several meetings and that ways were being explored to involve judges in the Courts Service and in arrangements for budget-setting.

But last week Lord Woolf, the last Lord Chief Justice, said that more needed to be done. He told MPs that the courts’ budget needed to be ring-fenced and no steps had been taken to do so.

Lord Phillips of Worth Matravers, the Lord Chief Justice, and his colleagues take the view that if ministers want judges to take account of the costs of sentences, this must be put in legislation.

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