The Home Office is to abandon pilot schemes for "weekend prison" to free up places in jail for serious offenders.
While not in prison, offenders would work or look for a job
Intermittent Custody Orders were launched in January 2004 for people who had committed an offence but were not judged high risk.
When they were not in prison, offenders were under the supervision of probation officers, either working, looking for a job or doing unpaid community work.
The sentences will be withdrawn on 20 November, the Home Office said.
The decision comes as jails in England and Wales are so overcrowded that Home Secretary John Reid was forced to house prisoners in police station cells.
Home Office minister Baroness Scotland said although there were some benefits to the three-year pilot, the people it dealt with were not a priority.
"All of our attention, energies and resources must go into protecting the public from the most and more serious offenders," she said.
Critics of the scheme said courts had tended to overlook the sentence, cells were under-used and the pilot may not have been cost-effective.
The scheme was unveiled two years ago by the then Home Secretary David Blunkett at Kirkham Prison in Preston and Morton Hall prison in Lincoln.
Since then, 447 people have been served intermittent custody orders, the Home Office said.
Of those, 323 were male prisoners and 124 were women.
The sentences were used for criminals convicted of violent crimes, theft, public order offences, fraud and forgery.
Offenders spent weekends or weekdays in one of the 78 cells in specially constructed residential units, outside the main perimeter fence of both jails.
The rest of their time was spent in the community supervised by probation officers. If they failed to behave, they could be given full-time custody.
But the scheme, which cost £4m in total, did not take off as anticipated.
The Chief Inspector of Prisons, Anne Owers, told the BBC that the scheme had good intentions but did not turn out to be "viable" enough.
She said she thought "the motives were good ones, but I don't think the outcome was very, very successful.
"I don't think the issue was with particularly the courts. I think it was more that it simply didn't prove to be viable for many of the people that needed it."
A report by researchers at King's College, London, released by the Home Office, showed that some units for part-time prisoners were left empty during the week.
It said 88% of sentences were ordered for weekend custody, meaning weekday custody was "considerably underused".
Judges who used the sentence were enthusiastic about applying it to offenders with jobs or childcare duties, the report said.
Figures up until July last year showed less than 10% of offenders breached the conditions.
But it added that courts tended to overlook the sentence while training and publicity needed to fill spaces may not be cost effective.
Director of the Prison Reform Trust Juliet Lyon said: "The lesson is clear - government must have the courage to promote and develop community sentences and court diversion schemes, rather than rushing to legislate with new fancy forms of incarceration."
Nacro, a crime reduction charity, supported the call, saying resources which would have been spent on weekend prisons, should be used to strengthen community sentences.