The number of prisoners has been rising for a decade. Prisons are in danger of a summer crisis with overcrowding "spiralling out of control", a charity has warned.
A Prison Reform Trust study says the previous record jail population of 77,774 in England and Wales could be passed in "a couple of months".
It says that many officials are privately predicting the prison system will be "entirely full" by the summer.
The Prison Service says it still has spaces and that a number of projects are under way to add extra capacity.
Juliet Lyon, director of the Prison Reform Trust which campaigns for change in the sector, said: "Overcrowding and reconviction rates are both spiralling out of control.
"Unless government acts now to reserve scarce prison places for serious and violent offenders, the summer will collapse into a chaotic mess of police cells, pre-fabs, prison motorway vans and decommissioned hulks."
The record population of October 2005 saw the prison system just a few hundred places from being full, the Prison Reform Trust study said.
A Christmas lull in the processing of court cases relieved some of the pressure, but "from the beginning of 2006 the pace began to pick up again", with the population at just over 77,000 in late March.
"What is now becoming an annual crisis in capacity looks set to hit earlier and harder in 2006."
The Prison Reform Trust report said overcrowding meant jails were unable to do their proper job of rehabilitating offenders.
"Rapidly rising numbers have reduced many prisons to locked warehouses in which prison officers are called upon to act merely as turnkeys, processing people in transit from jail to overcrowded jail."
Between 1992 and 2004 the reconviction rate among former prisoners rose from 51% to 67%, indicating that "overcrowded prisons simply don't work".
Home Secretary Charles Clarke said the government had done "a great deal" to tackle reoffending.
"We have focused very much more on getting proper partnerships to stop reoffending. It will take a very long time to achieve, which is why we have ordered a five-year strategy," he told BBC Radio 4's Today programme.
"But the fact is that what we have to do is focus the whole system on reoffending and overcrowded prisons make that much more difficult."
Ms Lyon said that to relieve some of the pressure on prisons, "political leadership" and extra resources were needed to strengthen the credibility of community penalties.
But shadow home secretary David Davis said two recent murders by people on probation underlined the continued need for custodial sentences.
"Whilst the problem of prison overcrowding obviously needs to be addressed, the murders of John Monckton and Mary-Ann Leneghan should demonstrate only too clearly that it would be dangerous to replace prison with a non-custodial sentence."
And Dee Edwards, from campaign group Mothers Against Murder and Aggression, said the rights of victims were too often overlooked in favour of prisoners' needs.
"Anyone who is a danger or... who ruins people's lives should be in prison," she said.
The Prison Service said there was still "existing capacity" in the system and that projects were "under way to increase the operational capacity of the prison estate".
It said that the number of prison places had increased by about 4,000 in the past two years and that it would reach 80,400 in 2007.
While there was "evidence that at times of high population pressure the provision of regimes in prisons can be affected", it said "everything possible is done to minimise disruption".
Since early 1993, when about 41,500 people were in jail, there has been a rapid increase in the prison population, but extra prison spaces have also been added.