An influential group of MPs has called for the prisons building programme to be slashed after the general election.
The cross-party Justice Committee urged the next government to abandon the plans in favour of measures to reduce crime.
The Ministry of Justice has shortlisted seven consortia for a £1.8 billion framework to design, build and operate five large PFI prisons in England and Wales.
It is part of a plan to increase the prison system’s capacity to 96,000 places by 2014.
But the Justice Committee’s report, Cutting crime: the case for justice reinvestment, said: “When public spending needs to be cut, major expenditure commitments – such as the prison-building programme – require even more rigorous scrutiny than usual.
“We believe the government faces a choice of risks: either to muddle through with the current plans hoping that commitments made… will prove affordable, or to make more radical decisions… by shifting resources away from incarceration towards rehabilitation and prehabilitation.
“Our evidence convinces us that the latter approach, which we recommend, presents a prudent, rational effective and humane use of resources over the longer-term and is necessary if the current costly prisons crisis is not simply to recur.”
Three established partnerships are on the list - Carillion with G4S; Interserve with Kalyx; and Skanska with Serco.
Balfour Beatty is teamed up with US operating firm GEO Group and Bouygues with Reliance Security Group.
Laing O’Rourke is shortlisted with Mitie and Wates with MTC.