Plans for three 2,500-place Titan prisons costing an estimated £350m each are to be ditched, the BBC understands.
Instead, Justice Secretary Jack Straw is expected to reveal proposals for five 1,500-place jails, with two set to go ahead immediately.
Sources say the decision has nothing to do with the Budget or making savings.
But Jack Straw's ministry of justice wants to have it both ways. According to the Guardian, a Ministry of Justice spokesman said.
"The justice secretary will make a statement on this issue shortly, and we cannot comment further on speculation."Even if we are the source of that speculation...