Plans to close Victorian-era jails in England and Wales and sell them for housing have been scrapped.
The government proposed shutting the "most dilapidated prisons" with hopes of building more than 3,000 new city centre homes on the old sites.
But the move has been scrapped after Prisons Minister Lucy Frazer told MPs that ageing cells were still needed to house increasing numbers of offenders.
PM Boris Johnson has promised to build an extra 10,000 new prison places.
New prisons are regarded as cheaper to run and easier to equip with the training and work facilities needed to help rehabilitate offenders.
The programme of "new for old" jails was first outlined in November 2015 when Michael Gove was justice secretary.
The move was then suspended in 2017 after a sudden rise in the prison population.
But plans were revised in November of the following year when the government said "old, expensive and unsuitable accommodation" would be shut down.
However, Ms Frazer told the justice select committee on Tuesday: "If the numbers... stay the same we need to be prepared to house people who come to prison and that will mean we need to keep our Victorian prisons in operation."
Among those thought to be given a reprieve from closure are Dartmoor, in Devon, and Pentonville and Wormwood Scrubs in London, according to BBC home affairs correspondent Danny Shaw.
Ms Frazer said Downing Street remained committed to building the extra places because more offenders would be locked up after police forces begin recruiting an additional 20,000 officers by 2023.
And she said a further 2,000 places would be required by 2030 as a result of sentencing changes for violent criminals and sex offenders.
Last week, it was announced that a 200-bed 'open' prison unit on the site of Hewell Prison, Worcestershire, would be closed because it would be too costly to refurbish.
The Prison Reform Trust said the government had "quietly abandoned the policy that would have made the biggest difference" to improving jail conditions.
Director Peter Dawson said: "All the many Victorian prisons that time and again attract the worst inspection reports will stay open."
He added that overcrowding was "more likely to get worse than better" as a result.
"Ministers know that this produces an unsafe, indecent prison system that puts lives at risk," he said. "The responsibility for it lies squarely at their door."