Home Secretary John Reid has acknowledged it was a "mistake" for the Government not to foresee it would need more prison places to cope with the increasing numbers of offenders sent to jail.
Mr Reid was struggling to get to grips with the prisons overcrowding crisis after a second child sex offender was released by a judge because of the shortage of places.
With relations between the Government and the judiciary in danger of plummeting to a new low, Tony Blair was drawn into the row, insisting dangerous offenders should be jailed.
However, on Friday night, Mr Reid accepted the Home Office should have realised sooner that tougher sentencing policies would mean more jail places would have to be built.
"It is a mistake not to forecast that we would require larger number of prisons than we have got at present, by putting away a greater number of dangerous offenders for a longer period," he told Channel 4 News.
"I have attempted to remedy that by a 'buy and build' policy of already asking for 8,000 more prison places."
The Association of Chief Police Officers (Acpo) also weighed into the row urging the courts not to release dangerous offenders onto the streets.
In a statement on Friday night night, Acpo president Ken Jones acknowledged more prison places were needed, but said it was important the public was not put at risk.
"Convicted offenders who pose danger to our communities must continue to be dealt with in line with current sentencing guidelines," he said.
"Courts releasing inappropriate offenders into our communities present avoidable risks, and can only undermine public confidence and draw police from their core roles."
