Justice Secretary Jack Straw said he had secured an extra £1.2 billion for a building programme which will see the number of prison places in England and Wales increase to 96,000 by 2014.

One of the new prisons - dubbed "Titan" jails by Mr Straw, and 1,000 beds larger than Britain's current largest - will be in service by 2012, with a further two expected to be built by 2014.

The plan was announced as part of a major review of the prison system, which is struggling with record levels and severe overcrowding.

Author of the programme - Government trouble-shooter Lord Carter of Coles - recommended ministers should use an existing process to force through planning permission for the Titan jails as quickly as possible.

There will be a shortage of prison places of up to 3,000 by next summer and up to 6,000 in 2009, his report said. The problem would get worse if nothing was done, leading to a shortfall of 10,500 by the middle of 2014, he added.

Mr Straw told MPs that to ease short-term problems he plans to convert a former RAF base at Coltishall in Norfolk into a low-security prison within the next 12 months.

He confirmed he was also "actively looking" for a prison ship, with the purchase of two possible vessels being explored.

Assistant general secretary of probation union Napo, Harry Fletcher, said: "The decision to build three large Titan prisons is extremely controversial. It goes against all previous advice which has been for smaller units close to where prisoners live."

President of the Prison Governors' Association, Paul Tidball, said of the Titan jails plan: "We accept that greater economies could be found from a larger scale prison but these have to be set against the costs which flow from the increased risk of lack of control.