Meanwhile former home secretary David Blunkett said the situation in prisons in England and Wales would “force” the government to reform the Indefinite Sentences for Public Protection (IPPs) system he introduced.
About 2,800 people are still serving IPPs, which have no set end date.
Lord Blunkett, who now serves a Labour peer in the House of Lords, told the BBC that “radical” changes should also be made to the way they can be recalled to prison to stop what he described as a “revolving door” effect.
To run smoothly, the prison system needs 1,425 free cells in men’s prisons, but media reports suggest only 700 spaces are currently available.
Latest figures show 83,380 inmates are currently being held in the adult male estate.
On Thursday, Prime Minister Sir Keir Starmer said the scale of the problem in prisons was “worse” than he had thought.
Most prisoners currently serve half their sentence in jail and the other half on licence, facing re-imprisonment if they violate parole.
But Friday’s announcement could see that reduced to 40%, a move the former Conservative justice secretary Alex Chalk reportedly pressed Rishi Sunak to make before the election.
Justice officials are thought to have been keen for further measures to ease the pressure on jail cell space to have been introduced earlier.
The Prison Governors’ Association (PGA) welcomed the announcement of new measures and called for a “full review”, saying, “The public must never be placed in this position again.”
The Ministry of Justice is already building six new prisons to create an extra 20,000 places as demand grows for cell spaces, partially because of the Government’s campaign to hire 20,000 more police officers.
About 6,000 spaces have been created and about 10,000 will be built by the end of 2025.