Prisoners will be able to win �1m

A National Savings & Investments spokesman said "prison guidance" was given by the Home Office on the matter.

It was decided Treasury-backed Premium Bonds were not a gamble like the National Lottery, but an investment.

Anyone with Premium Bonds is entered into a monthly prize draw with two �1m jackpots and tax-free prizes ranging from �50 to �100,000.

The �1 bonds are repeatedly entered into the draw and can be reclaimed at any time, making it a relatively safe investment.

Winners of the �1m prize are informed of their success in person by a National Savings & Investments official, which opens up the possibility of officials turning up at prisons to present people with cheques.

Being able to win �1m while in prison - what message does that send out to people in prison who are meant to be being punished and rehabilitated? Norman Brennan Victims of Crime Trust What are Premium Bonds?

"The issue first came up in 2004 and we checked with the Home Office and it said prison guidance said prisoners were not allowed to buy Premium Bonds while in prison," said a National Savings & Investments spokesman.

He added: "We have since received prison guidance saying prisoners can now buy Premium Bonds."

But the change has reignited the debate about whether prisoners should be able to win large sums of money while being punished for their crimes.

In November the Home Office banned prisoners who were on day release from buying lottery tickets.

The move came after rapist Iorworth Hoare won �7m on the Lotto Extra after buying a ticket while on weekend leave from Leyhill open prison in Gloucestershire in 2004.

'Ricochet effect'

Norman Brennan, director of the Victims of Crime Trust, criticised the decision concerning Premium Bonds.

He said: "It will have a ricochet effect of reminding victims of the trauma they went through.

"Being able to win �1m while in prison - what message does that send out to people in prison who are meant to be being punished and rehabilitated?