A computer system intended to track offenders is to be scaled down after the costs of the project more than doubled in just six months to exceed Pounds 155m.

In what opposition MPs labelled another "government IT fiasco", the Ministry of Justice said the project, known as C-Nomis, would be introduced in prisons only and not extended to the probation service, as originally planned.

The project was suspended last summer by the ministry after it was discovered there was insufficient government funding for the programme to continue as specified in a contract drawn up with Electronic Data Systems in 2004.

Under a revised plan, C-Nomis will continue to be rolled out across the prison service, with the National Probation Service using an existing, separate system pending the replacement of obsolete software and hardware.

In a written statement to MPs, David Hanson, justice minister, said the government's intention, following a review of the IT project, remained that of enabling "more efficient and effective" operational management of offenders.

"This has been a successful review, delivering a reformed programme which is now set to provide real operational improvements for practitioners in managing offenders alongside other reforms across the criminal justice system," Mr Hanson said.

Nick Herbert, shadow justice secretary, said the decision to shelve part of the original computer project "blew a hole" in the government's pledge to deliver improved co-ordination between the prison and probation services. "Ministers were explicit that C-Nomis was central to delivering 'end-to-end offender management', with prisons and probation staff sharing constantly updated information," he said.

"This is not just another government IT fiasco but also a serious setback for the aim of reducing re-offending and making our communities safer."

Last night a spokesman for the Ministry of Justice stressed that arrangements were being made to ensure sharing of core information between prisons and probation areas.

The ministry faced further embarrassment when it emerged that a record number of prisoners have been held in police cells over the last year because of jail overcrowding.

Figures obtained from the ministry by David Ruffley , shadow police reform minister, show that over the last year the number of nights that prisoners, who should be in prison, spent in police cells climbed from 4,616 to 60,953.