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The construction of five 1,500-place jails will not be procured through the Ministry of Justice鈥檚 拢2.3bn prisons framework.

The prisons will instead be tendered individually using the PFI despite recent difficulties funding these projects. The move has added to industry fears that the public sector is increasingly willing to procure large projects 鈥渙ut of framework鈥� to take advantage of the buyer鈥檚 market for construction services.

Jack Straw, the justice secretary, said on Tuesday that plans for three Titan prisons, which would have cost a total of 拢2.9bn, were being replaced by five smaller jails costing 拢3.1bn.

A spokesperson for the ministry confirmed that the 鈥渕ini-Titans鈥� would be PFI-funded, and that construction firms would be invited to bid for them in an open competition.

The 12 contractors on the framework include Wates, Kier and Willmott Dixon. These have been used for the construction of prisons since 2004.

The ministry did not announce whether the Titans were to have been procured using the PFI or the framework.

A source close to the framework said: 鈥淭hey are supposed to offer some form of security 鈥� it鈥檚 why everyone wanted to enter into it.鈥�

The PFI has been one of the victims of the credit crunch, as banks have been increasingly unable or unwilling to finance projects. Last month, the government was forced to launch a 拢2bn fund to try to kickstart 拢136m worth of schemes that stalled through lack of funding.

The first two mini-Titans will be built at Runwell in Colchester, and Beam Park West in Barking.