It is understood that most of the five new prisons planned by Labour are in his sights.
Today’s announcement will bring to an end years of expansion to the prison system and marks a clear policy shift towards reducing the prison population.
It is a major concession to the Liberal Democrats who pledged to scrap prison building altogether in their Election manifesto.
Fewer offenders could be locked up in prison and more given community sentences under reforms of the criminal justice system being planned by the Government.
Clarke is also expected to spell out plans to hire voluntary and private sector organisations on a payment-by-results basis to reduce reoffending, with financial rewards for keeping released prisoners on the straight and narrow.
Clarke was last in charge of prisons when he was home secretary between 1992 and 1993, when the prison population in England and Wales stood at 44,628.
Today the current population is nearly double that at 85,000, which Clarke will question as a gross waste of tax payers money.