The prison population in England and Wales reached a new high last month

The chief inspector of prisons, Anne Owers, said the situation was "inherently unsafe" and called for the practice to be stopped immediately.

The men's jail, one of the largest in England and Wales with 1,000 inmates, was holding 39 young adults on remand when inspectors visited earlier this year.

Some of the 18- to 20-year-olds were housed in the vulnerable prisoner unit (VPU) alongside convicted rapists, child abusers and other sex offenders.

The report said: "Staff on the VPU alerted inspectors to a situation where they believed that a young prisoner was being groomed by an adult prisoner on the wing.

Overcrowding may well have forced the prison to use inappropriate accommodation for this age group Enver Solomon, Prison Reform Trust Housing young inmates

"We do not believe that remanded young prisoners should ever be held in VPUs.

"The practice of holding young prisoners, particularly those who are vulnerable and may previously have been exposed to abuse, on adult prisoner units is inherently unsafe and should cease."

The report added: "Risk assessments should be conducted to ensure that they are protected from potential harm associated with their location with adults."

The inspectors also said anti-bullying strategies needed to be improved, especially as staff believed the problem was on the increase.

However, the Prison Service said it had never received any allegations from staff or prisoners that young offenders on the VP wing were being groomed by adult prisoners.

No young offender held on the VP wing would ever cell-share with an adult prisoner Prison Service spokeswoman

"All young offenders on the VP wing are closely watched by wing staff, prison managers, and the independent monitoring board (formerly the Board of Visitors) and their status is reviewed regularly," a spokeswoman said.

"No young offender held on the VP wing would ever cell-share with an adult prisoner," she added.

There were five suicides in the jail last year "but the lessons from them had not yet been assimilated by managers or translated into practice by staff," the inspectors said..

About half of all inmates had no allocated work and spent most of the day locked in their cells.

Prison Reform Trust spokesman Enver Solomon said: "There are serious questions to be asked about why 18- to 20-year-olds were put in this sort of unit.

"At the time of the inspection, overcrowding may well have forced the prison to use inappropriate accommodation for this age group.

"Unconvicted young adults should in no circumstances be housed in a VPU."

'Fundamental problems'

The prison population in England and Wales peaked at a record 74,012 last month, although by last Friday it had slipped to 73,672 due to Home Secretary David Blunkett's decision to release more offenders early on electronic tags.

When inspectors arrived at Holme House to begin their report the figure was less than 73,000.

Ms Owers said: "Holme House is on an upward curve, following a significant decline.

"The governor and staff face a difficult task as they tackle some long-standing and fundamental problems, particularly in the face of a growing and increasingly volatile prison population."

The director general of the Prison Service, Phil Wheatley, said: "As Anne Owers rightly recognises, the new management team in place at Holme House is working hard to address the issues she raises.

"I feel confident that the prison is making good progress and that it will continue on that upward curve."

Holme House opened in 1992 and serves Teesside, North Yorkshire and parts of Durham.