Ministers plan to send more prisoners into bail hostels
Ministers plan to increase the number of offenders and remand prisoners released into bail accommodation in England and Wales, it has emerged.
A Ministry of Justice memo said the scheme - less expensive than prison - should be used "as fully as possible".
But the BBC's Danny Shaw said the public would want reassurance that security was not compromised.
The running of the Bail Accommodation and Support Service was taken over this month by private firm Stonham.
The company took up the contract from another private firm, ClearSprings, which ran more than 200 centres in England and Wales.
In a memo to prison governors and probation chiefs, the Ministry of Justice said it expected the new contractor to make changes to allow referrals to the service and prison releases to "increase".
Officials from Stonham confirmed 740 beds would be made available.
The bail hostel service houses prisoners freed early on electronic tags, offenders serving community sentences and defendants awaiting trial.
Critics, including the National Association of Probation Officers, have condemned the practice of using private firms to run bail hostels amid fears over supervision standards.
But a Ministry of Justice spokeswoman said bail accommodation prevented people from "needlessly and unjustly being held in prison".
"They are not hostels, these properties are private accommodation maintained by a contractor.
"People living in these properties receive individually tailored support from a visiting support officer to help them maintain the terms of their bail or licence conditions.
"If someone requires strict supervision, they would not be eligible to stay in these properties.
"There are no plans to change the strict eligibility criteria. No-one with a conviction or current allegation of a sexual offence will be eligible.
"Those who are believed to pose a high risk of harm, or who pose an unacceptable risk to other residents, neighbours or any other person will also continue to be excluded," she said.
The number of properties was determined by local need, and the scheme aimed to house people near their place of work and, where appropriate, close to family and friends, she added.
The ministry awarded the contract to ClearSprings in 2007, paying it £5.8m in 2008-09 to manage bail accommodation.
The prison population in England and Wales reached a record high in April, exceeding 85,000.