Mr Bushell said the use of court cells cost £1m a week
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Convicts should be set free a week early to stop court and police cells being used to tackle overcrowding, according to jail managers.
The Prison Governors Association said ministers needed to give the system some "breathing space".
General secretary Charles Bushell warned: "We have reached bust and nobody seems to have any clear plan as to what we are going to do."
The prison population in England and Wales is 80,977 - 481 from capacity.
'Unpalatable decision'
Ministers say another 8,000 spaces will be available within five years - but critics say this will not solve overcrowding.
Mr Bushell said some prisoners were now being held in court cells - designed only for defendants waiting to appear in the dock - for almost 48 hours.
He told the BBC's Today Programme he recognised there would be objections to early releases but that this was outweighed by the cost to the public purse.
He said: "Of course they will say that, but these people are also taxpayers who are paying through the nose - we reckon over £30m since last September - simply and solely to ensure that a minister does not have to make an unpalatable decision.
'Awful accommodation'
"We have a little bit of accommodation coming on stream in July but nowhere near enough to keep up with the current rise."
He complained that legislation had been passed to lock prisoners up for longer without ministers having first ensured there were sufficient places.
"If you start thinking in terms of letting those people go a week early - don't do it immediately, do it a week or two weeks hence so that we have time to make sure their discharge is planned .
"Then that will free up sufficient spaces so you don't have to spend this £1m a week on awful accommodation and you can start with some sort of game plan because at the moment nobody knows what the Ministry of Justice's plan is."
He said the court cells had not been adapted for use over longer periods and that, during the last two weekends, West London Magistrates Court had housed inmates for nearly two days.
"That cell has no more than a bench in it on which we put a mattress and a pillow and a couple of blankets," he said.
The PGA is in official dispute with the Prison Service over the use of court cells.
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