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Two prisons in the south are to close, as part of a big reorganisation of the country's jails.
Under the plans, Kingston Prison in Portsmouth, built in 1877 and holding 200 inmates, will close along with Camp Hill on the Isle of Wight which houses 600 prisoners.
The Government say there won't be any compulsory job losses - but prison staff will have to move to other jails to find work.
One of the south-east's oldest prisons is to close.
Canterbury is one of six jails being replaced by a single 2,000-inmate prison to be built in London or the north-west.
Justice Secretary Chris Grayling said: "We have to bring down the cost of our prison system, much of which is old and expensive.
"But I never want the courts to be in a position where they cannot send a criminal to prison because there is no place available.
"So we have to move as fast as we can to replace the older parts of our prison system."
The announcement comes just days after the government unveiled plans to allow private firms and charities to supervise low-risk offenders on probation in England and Wales.
Isle of Wight MP Andrew Turner has given an initial response to the announcement made this morning following a national review of the prison estates, that part of HMP Isle of Wight is to close.
Mr Turner said: “This is very disappointing and I am of course very concerned about this announcement and the ramifications for Island residents and the local economy. However, at least we are not suffering full closure of HMP Isle of Wight.
He added he will be seeking an early meeting with the Secretary of State to discuss the implications this will have on the Island’s economy, what can be done to support staff affected by the closure and the future of the actual buildings and grounds at Camp Hill.
Six prisons in England are to be closed and three more will be partially shut, the Ministry of Justice has announced.
It will result in the loss of 2,600 places in what the statement called "old and uneconomic" prisons and is expected to save £63m per year from the cost of running prisons.
The six prisons that are to close are Bullwood Hall in Essex, Canterbury, Gloucester, Kingston in Portsmouth, Shepton Mallet in Somerset and Shrewsbury.
Prisons in Chelmsford, Hull and Isle of Wight are to be partially closed.
The Ministry of Justice says it also plans to build a new super prison with 2,000 places.
It is set to be around 25% bigger than the existing largest facility.