The home secretary, Charles Clarke, is to announce legislation this week to abolish local probation boards so he can take over their statutory powers and put their services supervising 200,000 offenders out to private tender.

The Guardian has learned that the plan could see private companies such as Group 4 managing dangerous offenders and advising the courts on whether to send offenders to prison and when they should be released. The decision to "market-test" probation services is believed to be the first time that an entire group of public sector professionals has been threatened with privatisation.