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HLM has been appointed to design a prison next to Belmarsh jail in south-east London. The move is part of home secretary John Reid鈥檚 urgent drive to expand prison accommodation in the UK.

The firm is working on a project, which will hold 700 prisoners, as part of an Interserve-led consortium that includes Jacobs Babtie.

The scheme is a direct appointment through a framework agreement. A source close to the project said it was not a PFI contract, but the Home Office declined to comment. It said: 鈥淭he site is owned by the National Offender Management Service. We have not yet made an announcement about its funding.鈥�

The Belmarsh project is one of two prisons to be rushed on site to ease the current overcrowding crisis. The second will be a 600-capacity facility located in Maghull, next to Ashworth mental hospital in Merseyside.

Under Greenwich council planning policy, 10% of the energy for the prison must come from on-site renewable sources

The combined cost of the two is expected to be at least 拢160m.

The Belmarsh prison will be submitted for detailed planning permission in the spring. One of the issues the project team is grappling with is Greenwich council鈥檚 policy that 10% of all energy must come from on-site renewable sources.

好色先生TV understands that there will be a second prison, also close to Belmarsh, that will be built under a PFI contract. It is expected to come to market later in the year.

鈥� The government could end up with billions of pounds of PFI debt on its balance sheet after the Treasury agreed to an accountancy change last week. This could take the Treasury perilously close to breaking chancellor Gordon Brown鈥檚 rule that national debt should be less than 40% of GDP.