An inspection has been carried out at HMP Whitemoor
A prison inspection report has detailed the "fear" felt by staff at Whitemoor high security jail in Cambridgeshire at the radicalisation of Muslim prisoners.
The Chief Inspector of Prisons said the findings highlighted a growing "disaffection and distance" between Muslim inmates and the prison system.
Anne Owers said the growing situation "urgently" needed addressing.
The National Offender Management Service said work to improve prisoner and staff relations was "a priority".
Ms Owers said the Prison Service "needs to equip staff better to deal with the growing number of Muslim prisoners".
Her report comes about four months after the publication of a report by the Prison Service which also expressed concern about problems with the high number of Muslim inmates at Whitemoor.
Ms Owers' report says a fundamental problem at HMP Whitemoor is the relationship between staff and the 120 Muslim inmates - almost a third of the total number of prisoners.
According to inspectors, officers tended to treat Muslim prisoners as extremists and potential security risks, even though only eight of them had been convicted of terrorist offences.
Officers expressed a "fear" that increasing numbers of prisoners were converting to Islam and being radicalised.
Prison officers said Muslim prison gangs are trying to force other inmates to sign up to Islamic radicalism.
Inspectors were told that extremists at HMP Whitemoor were pushing a "strict and extreme" interpretation of Islamic practice.
Ms Owers said: "There was a perception among officers that some Muslim prisoners operated as a gang and put pressures on non-Muslim prisoners to convert, and on other Muslim prisoners to conform to a strict and extreme interpretation of Islamic practice."
She said staff were reluctant to tackle "inappropriate behaviour" and that Muslim prisoners were able to "police themselves".
She added: "In particular, as we have said in relation to other prisons, especially high security prisons, the Prison Service as a whole needs to equip staff better to deal with the growing number of Muslim prisoners.
"This inspection and others have charted a growing disaffection and distance between those prisoners and the prison system, a gap which urgently needs to be bridged."
BBC home affairs correspondent Danny Shaw said the Whitemoor report echoes findings of a previous inspection at Belmarsh prison in London, which said staff needed training and support to counter the risk of radicalisation, while at the same time avoiding alienating the majority of Muslim prisoners.
Phil Wheatley, director general of the National Offender Management Service, said: "The chief inspector is right to highlight the challenges and risks Whitemoor is facing.
"It is also important to recognise the action being taken to manage challenging prisoner profiles.
"A more sophisticated approach to addressing bullying and the management of bullies and their victims is now in place and is bringing improvements.
"Work to improve the relationships between staff and prisoners is a priority and measures have been implemented to tackle this, including training to develop staff understanding of the growing Muslim population."
An EU-commissioned report warned earlier this week that urgent action was required to stop brainwashing being carried out by jailed extremists.
Dr Peter Neumann from King's College London said European governments should observe prisons more closely as they were likely to become "major hubs" for terrorist recruitment, suggesting creating "jihadist prisons" in which to isolate Islamist militants.