Plans for a £100m prison to be run by the private sector have been scrapped, Scottish ministers have said.
The replacement to Low Moss will be run by the Scottish Prison Service
The 700-cell jail, to replace Low Moss near Bishopbriggs, which closed in May, will instead be run by the Scottish Prison Service.
Justice Secretary Kenny MacAskill said prisons should be owned and operated by the public sector.
Labour leader-elect Wendy Alexander said it was right to proceed with a privately built but publicly run jail.
The closure of Low Moss, which held 200 inmates, came after a prison review in 2002, under the previous Labour/Lib Dem government.
The review resulted in a decision to build a private prison at Addiewell in West Lothian and a second prison at Low Moss for which the public and private sector would compete.
However, Mr MacAskill said the Addiewell jail, along with the current private prison at Kilmarnock, could not be brought under public control.
"Prisons are sadly required in our society - we don't live in a Utopia," he told BBC Scotland.
"But they should be owned and operated by the public sector."
The justice secretary added: "Prisons are for public safety, not for private profit. So we are drawing a line in the sand."
"Had we not made this change at Bishopbriggs, Scotland would have veered towards a situation where a quarter of our prisoners would have been in private prisons.
"That would be the highest in the developed world - greater than in the United States, and even in Arnold Schwarzenegger's California."
The procurement process for the Low Moss replacement is to be suspended and bids will instead be invited from the private sector to design a prison that will be operated publicly.
The Scottish government also stressed the move was part of a wider strategy which included the review of community sentences.
Commenting on the Low Moss decision, Ms Alexander said: "I think, myself, that the right decision has been made here that we go for private build which can be done quickly and efficiently, but publicly operated."
She added that the problem was inside prisons where there is a "pretty terrible" rate of people returning and this is what should be tackled.
The announcement was welcomed by the Prison Officers' Association in Scotland.
The decision ended a long period of uncertainty for the Scottish Prison Service and the association's members, a spokesman said.