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The Ministry of Justice will announce the closure of three prisons with the loss of 800 places by July, it has been reported.
The move signals Justice Secretary Kenneth Clarke's determination to press ahead with reducing the prison population.
Ashwell prison in Rutland, Lancaster Castle, Lancashire, and Morton Hall women's jail in Lincolnshire will all close, according to The Times newspaper.
The inmates will be moved elsewhere while staff will be transferred to nearby prisons or invited to apply for voluntary redundancy.
The latest MoJ figures show there are currently 82,991 prisoners, about 5,000 less than the usable operational capacity of 87,936.
In December Mr Clarke set out plans to reduce the prison population in England and Wales by about 3,000 over four years.
Mr Clarke's plans would see judges given more discretion over how long killers spend behind bars, more offenders handed fines or community sentences, and foreign nationals allowed to escape jail as long as they leave the UK forever.
Mr Clarke said it was a "simpler, more sensible" approach but Tory backbenchers voiced concern that criminals would avoid being sent to prison.
Ashwell prison, a former Army camp, is a facility for medium risk males with a capacity of 214. Lancaster Castle is leased from Lancashire County Council while the land itself is owned by the Duchy of Lancaster. It has a capacity of 238. And Morton Hall, a former RAF base, is a women's prison with a capacity of 392. It will be converted into an immigration removal centre housing illegal immigrants awaiting deportation, according to The Times.
An MoJ spokeswoman said: "An announcement on prison capacity will be made to Parliament."