New prison units are to be built for teenage girls so they are no longer detained alongside adult inmates, Home Secretary David Blunkett has said.
The home secretary announced the plans at Holloway prison
All female inmates under the age of 18 in England and Wales will be housed in secure centres by 2006 he said while on a visit to London's Holloway jail.
The move follows two critical reports which said the system was failing "vulnerable and damaged" young women.
More than 80 girls aged 16 and 17 are currently held with adults in prison.
Mr Blunkett said: "Moving juveniles to specialist units is a really positive step for young inmates and the prison service as a whole.
"The staff at Holloway do a very good job in difficult circumstances with people under 18, but these prisoners have a particular vulnerability and should be cared for by specialist staff with facilities that address their unique education health and social needs."
However, a number of campaign groups argued against the proposals, saying girls should be kept away from prisons.
Frances Crook, director of the Howard League for Penal Reform, said: "Specialist units for girls in adult prisons have been tried and failed not least because it is impossible to detach them totally from the rest of the prison.
"Even if physically separated from the adults, girls held in prison are still living in a punitive adult culture with high levels of self-harm, suicide, poor staff training and low staff ratios."
Juliet Lyon, director of the Prison Reform Trust, said that trying to make prisons a safe environment for damaged young women was of "questionable use".
She said small secure support centres near the homes of young offenders would be more valuable.
Mr Blunkett's move follows findings by three bodies which said while there were improvements in prisons, greater investment was vital for 15- to 18-year-olds leaving custody.
Chief Inspector of Prisons Anne Owers, together with education watchdog Ofsted and the Youth Justice Board, found around 90% of young people wanted to stop offending.
But a lack of support meant work done with them while in custody was not kept up on release.
Ms Owers said the reports also showed that adult female prisons were not suited for girls.
"For girls who've often got very low self esteem and a lot of education deficits to make up that is not a good environment.
"About half of those Ofsted saw suffered from depression while in prison so that's a problem," she told BBC Radio Four's Today programme.
"What's an even greater problem is that whatever has happened to them in that safe period in custody is not carried on within the community."
The figures showed 91% of girls and 89% of boys wanted to stop offending and believed finding a job was the factor most likely to prevent re-offending.
The reports said 32% of boys and 44% of girls felt they had done something in custody that would help them find a job on release.
Shadow home affairs spokesman on prisons Cheryl Gillan added: "If we continue to ignore the special needs of young female prisoners, we will simply store up problems for future generations."