Mr Straw set out a three-pronged strategy to make the prison service more effective. It included preventing prisoners re-offending after their release, giving them skills to allow them to earn an honest living and stamping out drug addiction inside jails.

At the annual general meeting of the Howard League for Penal Reform, the home secretary said simply spending more money on prisons is not the easy answer to improving the system.

"For many prisoners the feedback they receive in prison is the first time they have heard something positive about themselves.

Spending money is not the easy answer, the home secretary said

"We need to raise their educational standards on top of their self-esteem."

Some 75% of prisoners fall below basic numeracy skill standards and 60% below basic literacy standards, Mr Straw said.

"This makes them ineligible for 96 in every 100 job vacancies."

The home secretary also said that eradicating drug addiction in prisons is "fundamental" to breaking the vicious circle of offending among prisoners.

He hailed controversial random drug testing of inmates as a success, with positive tests falling from 25% to 19.9%.

He said: "There is no evidence of prisoners switching from smoking cannabis to taking heroin once they find themselves in jail".

Young offenders

Mr Straw expressed "concern" about the rising number of 15- and 16-year-old boys remanded in custody.

He said: "The remand population in this age group has increased. But the reason for this is spree offending among 10- to 14-year-olds.

"When these youngsters come to the attention of the courts once they reach the age of 15 they are remanded in custody.

"This is a sad reflection on the decay of the youth justice system."

Instead, Mr Straw called for more secure local authority accommodation to cope with the rise in juvenile offenders.

He said the government is considering introducing graduation-style ceremonies for offenders who complete community sentence orders - which could be renamed criminal work orders.

Violence 'compounds problems'

Howard League Director Frances Cook said the group was in favour of anything offering greater self-esteem to offenders so they do not re-offend once released from prison.

"Graduation ceremonies - whether they be for successful completion of drug testing course or community service orders - are a welcome initiative even if they are introduced just as an experiment."

But she slammed the growing numbers of teenagers who are remanded in custody once they are actually old enough to be brought before the courts.

She said: "There are high levels of violence in places where these young people are remanded to. This compounds offending problems.