Three new super-jails will be built in the next seven years allowing the number of prison inmates to grow by more than 10,000.

The £1.2 billion scheme announced today marks a shift away from sentence relaxation and early release schemes, as the Government battles to reduce prison over-crowding.

Jack Straw, Justice Minister, told the House of Commons that there were also plans to buy another prison ship, to help cope with an expected rise in the England and Wales prison population to 96,000 by 2014.

The three new jails, dubbed Titan prisons, will each be capable of holding 2,500 inmates. They are far bigger than any of the prisons currently in the UK.

The first of these extra large prisons is due to be completed by 2012 with the further two ready for use two years later.

Mr Straw told MPs that the Government was actively looking for a prison ship and would make other short-term measures to increase prison places while the new jails were under-construction.

“To provide additional capacity in the short to medium term we intend to convert the former Ministry of Defence site at Coltishall in Norfolk into a Category C prison,” he told the Commons.

The 10,500 places, funded by more than a billion pounds of new money, will be in addition to a 9,500 increase in prison capacity that has already been announced.

David Cameron, the leader of the Opposition, attacked Gordon Brown earlier for the current state of prison overcrowding.

“Everybody knows the reason that the aren’t new prison places is because he failed to build them,” he said during Prime Minister’s Questions.

“He can’t pretend like the man in the canoe that he hasn’t been around for the last five years.”

Mr Straw revealed the plans after studying the findings of a six-month review into prison overcrowding. The review led by Lord Carter of Coles was published as prison numbers reach 81,455 — a record for England and Wales.

Lord Carter’s proposals for a review of sentence structure have also been accepted by Mr Straw.

He revealed that the controversial indeterminate sentences, designed for those who pose a threat to society, would be overhauled. Indeterminate Sentences for the Public Protection (IPPs) will be amended so that they only apply to prisoners who are given a minimum tariff of two years in jail.

The IPPs - which were only introduced four years ago - have created a bottleneck in the prison system because inmates with a short tariff are often unable to complete the rehabilitation courses required to win parole, and so cannot be released.

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

Mr Straw said the Government would also look at the possibility of setting up a Sentencing Commission, which would link prison resources to the “overall sentencing framework”.

Critics have claimed that this would link individual sentences to the availability of prison places, but Mr Straw denied this, saying that the Commission would take a longer-term view.

The proposals for Titan jails were made in Lord Carter’s 55-page report. He admitted it would be a challenging target to open the prisons within a short time frame, but suggested that planning permission be requested directly from the Government to bypass local opposition.

He said there was a “compelling financial case” for building Titan jails so that up to 5,000 places in Victorian prisons could be closed down. The size of the prisons would allow economies of scale to assist with savings.

Lord Carter pointed out that Lancaster Castle Prison in Lancashire is said to be the oldest jail in Europe and that parts of Wakefield, Preston and Stafford Prisons were opened in the 1820s.

He suggested the Titans should be built in London, the West Midlands and the North West. They should comprise five units, each with about 500 offenders in different segments.

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