The £4bn merger between the prison and probation service is so large and complex that it faces a high risk of failure, according to leaked internal Home Office documents.

An internal paper presented to the second board meeting of the newly merged organisation on Monday and seen by the Guardian also warns that the confidence of ministers, unions and staff is in danger of being lost. It adds there is a serious risk that the 74,900 prison population will start to rise again if officials are unable to persuade the courts to use new community punishments instead.