Health and Home Office ministers are planning to create new holding centres for people such as Michael Stone, who was last week found guilty of the murder of Lin Russell and her daughter, Megan.
The Government is concerned that dangerous individuals with severe personality disorders which are not treatable are being left in limbo, posing a severe risk to the public. It wants to "take them out of circulation" before they kill.
In the weeks before the murder, Michael Stone, who confessed to fantasies about killing and torturing women and children, asked to be admitted to a psychiatric hospital but was refused a bed.
"There are a number of people at large who represent a real danger to the public," said a government source.
"We have to make sure we can identify these people, to assess the risk, and manage and control them and, in the case of the most dangerous, to remove them from circulation. Legislation doesn't currently allow us to identify and remove them. We are looking at a range of options as to the appropriate setting for holding these people."
The proposal, to be announced in the next six weeks and put out to consultation before a new Bill next year, could also include indefinite prison sentences for violent recidivist paedophiles.
Government officials are still considering how best to identify the people who pose the most risk.
The plans are likely to raise serious questions about the civil liberties of individuals who have not yet committed crimes but are regarded as dangerous.
Health ministers are also drawing up plans to help the seriously mentally ill, including emergency access to beds and support in the community.
Jayne Zito, page 4