Peter Russell, director general of the prison service, insisted staff would remain fully in control
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Separating loyalist and republican prisoners at a County Antrim prison could cost up to £14m.
The move is to be introduced in the wake of violent clashes between rival groups in Maghaberry jail and in the face of a "dirty protest" by a group of dissident republicans.
However, the director general of the prison service, Peter Russell, insisted that it would not mean a return to the system of
segregation in the now closed Maze Prison, under which paramilitary groups virtually ran their own prison section.
"The whole basis of our planning is that staff will remain fully in control here," Mr Russell stressed.
"I am not issuing any subcontracts for management of prisoners in houses.
"We fully intend that the governor, through his staff, will remain completely in control.
"To that end, we are spending the better part of £7m in this part of the prison to enhance physical security and we are developing training for staff so that they have the best possible equipment in which to tackle this difficult challenge."
Under the new regime, which may not come into effect until the end of this year or early in 2004, prison officers will remain on wings, cells will be locked and there will be regular checks on inmates
The separation is expected to cost between £12m and £14m. On top of an outlay of £7m at the prison, it is estimated that £5m - £7m will be spent on additional staff.
Steele Report
The consultation on prison reform was led by Sir John Steele, who was head of the Northern Ireland Prison Service from 1987 to 1992, and a former head of security policy for the Northern Ireland Office.
It followed recent protests inside Maghaberry jail and violent clashes between republican and loyalist inmates at the prison who wanted to be housed in separate wings.
Five dissident republican prisoners also took part in a "dirty protest" in the jail.
The review team spoke to more than 100 prisoners, to senior prison management, as well as unions and staff.
They heard the views of prisoners' families, the Board of Visitors and political parties.
They also visited Portlaoise jail in the Republic of Ireland, where different republican factions are held separately.