With the Government considering freeing more offenders early to ease the pressure, Charles Clarke, the Home Secretary, disclosed that 10,000 overseas nationals were locked up in England and Wales.
Their numbers have risen at seven times the rate for British citizens over the past five years, putting extra strain on a system already struggling to cope.
There are more than 160 different nationalities behind bars, with Jamaicans representing the largest group. There are also large numbers from Nigeria, Turkey, India, Pakistan and Ireland. Foreigners represent about one in eight of the prison population, which reached a record 77,774 last week.
Mr Clarke told the House of Commons Home Affairs Select Committee that it was ''very close'' to reaching the maximum capacity for jails in England and Wales of 78,147. He added: ''Twelve to 13 per cent of the occupants of British prisons at the moment are foreign nationals. That is a very large number indeed.
''From 2000 to 2005, the number of British nationals in British prisons increased by 11 per cent while the number of foreign nationals increased by 75 per cent over that period. If the foreign nationals had increased at the same rate as the British we would have about 3,500 fewer prisoners than we do today.''
Mr Clarke admitted that ministers were considering extending the home detention curfew scheme, under which offenders are released early on electronic tags, to ease the pressure on the system.The Home Secretary also said the emergency use of police cells to hold prisoners was possible.
He warned it could take four to five years to overhaul the prison system and admitted he was struggling to win the support of probation officers for controversial plans to encourage private companies to run probation services.
* A high-powered committee to investigate the biometric technology underpinning identity cards is being set up by the Government. The moves follow claims of widespread mistakes in scans of faces, irises and fingerprints in trials of the technology.