Well-behaved prisoners will have their "pocket money" allowances increased threefold, while unruly inmates will get only pounds 2.50 a week to spend, it was announced yesterday.
The move is part of a Home Office package of measures aimed at rewarding hard work and good behaviour while removing privileges from inmates who break the rules.
The limits on the amount prisoners are allowed to spend follows widespread criticism over the way IRA inmates at the top-security Whitemoor prison in Cambridgeshire were able to buy lobster takeaways, Reebok trainers and jeans.
Michael Howard, the Home Secretary, said: "Excessive access to private money is wrong. It can cause divisions and lead to violence and disruption."
The new weekly spending limits will range from pounds 2.50 to pounds 15 for convicted prisoners - pounds 130 to pounds 780 annually - with higher spending limits of pounds 15 and pounds 30 for unconvicted prisoners.
The limits include spending on phonecards and will be linked to prisoners' conduct, with the higher limit being given to better-behaved inmates. An annual spending limit of pounds 115, with a pounds 75 hobbies allowance, already exists, but this does not include spending on phonecards and is often not properly enforced.
The announcement comes two days after the Parkhurst escapee Keith Rose, whose calls were supposed to be restricted, rang the BBC and described how "amazingly easy" his break-out had been.
Inmates spend their money at the prison shops on goods such as toiletries, records and clothes. Luxury goods are now severely restricted. Offenders can earn money - usually from pounds 6 to pounds 10 a week - in the prison workshops. Any money left over from their allowances is put into a savings account. However, most "pocket money" is provided by relatives and friends.
Mr Howard also announced a new national framework on incentives and privileges based on rewarding good behaviour. He said: "Prisoners who behave responsibly, work hard and participate fully in the prison regime could qualify for extra visits and increased wages. Conversely, those prisoners who fail to conform and refuse to make positive use of their time in prison will find themselves on a basic regime with no privileges."Reuse content