Muslim preachers appointed by the Ministry of Justice are distributing hate speech leaflets and other extremist material to inmates, according to a leaked report obtained by The Times.

The review ordered last year by Justice Secretary Michael Gove found more extremist material in more than 10 prisons in November. Literature discovered by investigators condemned homosexuality, urged attacks against apostates and advocated a hard line interpretation of Sharia law.

The report found that extremist literature, some of it published in Saudi Arabia, was freely available on prison chaplaincy shelves, and weak guidelines and poor internal supervision meant there were few efforts to assess the suitability of Islamic literature before it was made available in prisons.

It also warns that chaplains in jails are fundraising for Islamic charities with links to terrorism. Jails in England and Wales currently hold 12,328 Muslim inmates, of whom 131 are convicted terrorists and 1,000 deemed vulnerable to radicalisation.

Plans being considered by Ministry of Justice officials to set up a 'British Alcatraz' in which to house Islamic extremist inmates were criticised by prison chiefs when reported in January.

Chris Phillips, former head of the National Counter Terrorism Security Office warned in April 2015 that staff shortages meant that extremists were not properly monitored in jails.