Sir Keir Starmer has not ruled out 20,000 prisoners being released early in a bid to ease pressure on the justice system - as the new prime minister told Sky News the last government acted "almost beyond recklessness" on criminals.
The state of the justice system has become one of the first major challenges Sir Keir has to face in charge of the country.
Overcrowding means the government is considering letting prisoners serve only 40% of their sentences, rather than the 50% which is currently in place.
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There are reports this could mean up to 20,000 prisoners are released early over "many" months.
Asked about this by Sky News's political editor Beth Rigby, Sir Keir said: "I'm not going to get ahead of the statement [we] will make on this, but, I am not going to pretend it's not a very real problem that's been left to us."
He said the criminal justice system was a "much worse problem" than he thought it would be.
"I am genuinely shocked by what I've seen, particularly as someone who's worked in criminal justice for a long time," the former chief prosecutor said.
"It is a basic function of government to have enough prison places for those that the courts are sending to prison.
"This is almost beyond recklessness from the previous government."
Problems with the capacity of prisons led to an early release scheme for inmates before the general election.
This included letting "high-risk" offenders out.
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Tap hereInitially, early releases were implemented in October last year, but were extended in March.
It means people serving stints of fewer than four years behind bars could be let out two months early.
It has been regular practice in the UK for prisoners to serve only 50% of their custodial sentence before being considered for release.
Alex Chalk, who was the previous Conservative justice secretary, appeared to suggest that Rishi Sunak decided to not take action to release more prisoners early as they thought it might be hard to get the policy past MPs.
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He told the BBC: "We have to remember there are seasons in politics, and it was difficult, as we know, at the end of the last parliament to be satisfied that you were going to get things through parliament because at the risk of stating the bleeding obvious you have got to win votes."
He added that reducing the time when people are considered for release "is the calculus that was taxing the prime minister and others".
Asked if this meant Mr Sunak opposed the plans to free up prison space due to political weakness, Mr Chalk said: "Even now I am not going to go into all the details about what was said behind closed doors, but I think it is reasonable to say there was a variety of views about what could be got through parliament."
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