Dodgy security giant G4S has suffered another blow to its credibility after inspectors slammed a company-run prison.

HMP Oakwood in Wolverhampton, the largest facility in Britain with 1,600 prisoners, had inexperienced staff and high levels of violence and self-harm, HM Inspectorate of Prisons (HMIP) said following a surprise visit.

In addition, the jail - dubbed "Jokewood" - urgently needed to address its approach to its near-300 sex offenders, many of whom were due for release without their offending having been addressed.

G4S was recently referred to the Serious Fraud Office for overcharging the government for tagging criminals and was heavily-criticised last year for its botched handling of the Olympics security contract.

The company said it had already taken steps to make improvements at the jail.

The inspection found there was clear evidence of drug and alcohol use, lack of access to basic facilities, and "very poor" health care.

Prison Reform Trust director Juliet Lyon said: "Last autumn, the Justice Secretary hailed the G4S-run prison, boasting a cost per prison place per year around one third of the national average, as an example of what the private sector could achieve in prisons. And indeed it is.

"Slashing prison budgets while warehousing ever greater numbers overseen by largely inexperienced staff has come at a dangerous cost. This prison is not a model for the future but a warning."

Despite G4S's retinue of mistakes Justice Secretary Chris Grayling still intends to allow the company to bid for probation service contracts worth £450 million.