It used to be a holiday camp. Now it'll be one of Her Majesty's hotels

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The head of the Prison Service yesterday toured a former Pontin's holiday camp which he hopes to transform into the country's newest jail.

But Richard Tilt, the Prison Service director-general, was greeted by local residents protesting at the plans for the 62-acre site at Heysham, near Morecambe, Lancashire.

An application to house between 400 and 700 low-risk prisoners at the former Ministry of Defence site is under consideration by Lancaster City Council. Prison officials are taking the drastic action in an attempt to cope with the escalating over-crowding crisis in the country's jails.

Mr Tilt said: "It's the sort of thing we're looking for and it's most important we get it up and running very quickly."

He is also awaiting planning permission to moor a floating prison ship at Portland Harbour, near Weymouth, Dorset.

Back at the holiday camp the director-general was shown around the deserted chalets, in single storey blocks. Apart from peeling wallpaper and worn chintz carpets, future prisoners could expect few luxuries.

The swimming pool and tennis courts would be demolished, along with a nautical style ballroom. Mr Tilt said the prison would provide jobs and boost the local economy.

But local residents gathered at the camp gates with posters proclaiming "Bar the Prison". Maureen Campbell, owner of a nearby caravan park, said: "We have a beautiful area here, a beautiful beach and we don't want it spoiling."

A local councillor, Geraldine Smith, said: "This is a district reliant on tourism. It's a nonsense to build a prison here."