Two privately-run prisons are among three the government has expressed "serious concern" over, Ministry of Justice (MoJ) ratings have revealed.
HMP Oakwood, run by G4S in the West Midlands, HMP Thameside, run by Serco in London, and the Prison Service's HMP Winchester in Hampshire, were given the lowest performance rating of one.
Oakwood and Thameside are among 14 privately-run prisons in England and Wales. There are a total of 134.
G4S said issues were being addressed.
The MoJ also said action was being taken but critics called on the government to "halt the privatisation of justice".
The ratings come after private security companies G4S and Serco came under fire for overcharging the government by "tens of millions of pounds" for providing electronic tags for criminals.
It triggered a government-wide review of all contracts held by the two firms.
'Deteriorated sharply'In the annual assessment a further 12 prisons were said to be "of concern", while the remainder were either rated as having an "exceptional performance" or "meeting the majority of targets".
Analysis
This is just what G4S and Serco do not need.
The two companies are trying to repair their bruised reputations after being accused by Justice Secretary Chris Grayling of over-charging his department by tens of millions of pounds for electronic tagging contracts.
A review of government contracts held by the two firms was set up after the tagging scandal, but the poor performance of Oakwood and Thameside is unlikely to help the companies' cause.
It is also bad news for Mr Grayling - who wants to increase private sector involvement in the justice system - to see two private jails opened on his government's watch at the bottom of the prison league table.
It has not escaped the notice of campaigners that publicly-run probation trusts in England and Wales, which the justice secretary is scrapping as part of his reforms, were all graded "good" or "exceptional".
Oakwood opened in April 2012 and is one of the largest jails in the country, with capacity for 1,600 male inmates. On its website, the prison says that it aspires to be regarded as "the leading prison in the world" within five years.
Responding to the ratings, a spokeswoman for G4S said the company was working with the MoJ to address issues.
"I am completely confident that Oakwood will go from strength to strength," she said.
Thameside opened in March 2012 and can hold 900 male prisoners.
Winchester Prison, built in 1846, was criticised by inspectors earlier this year after two elderly disabled men were locked up together for almost 24 hours a day, without easy access to showers.
Inspectors said standards at the jail had "deteriorated sharply".
'Fanatical obsession'In a separate set of MoJ figures, every probation trust in England and Wales was rated "good" or "exceptional" by the MoJ.
Prison reform campaigners said the ratings provided further evidence that Justice Secretary Chris Grayling needed to reconsider his promised "rehabilitation revolution", under which private security firms would be paid to supervise low to medium-level offenders across England and Wales.
Frances Crook, chief executive of the Howard League for Penal Reform, said: "There could not be a more damning indictment of the government's fanatical obsession with justice privatisation than its own performance figures.
"Last autumn, the justice secretary hailed G4S Oakwood as an example of what the private sector could achieve in prisons. We agree. The prison, ranked joint-bottom in the country, is wasting millions and creating ever more victims of crime."
"Start Quote
End Quote Frances Crook Howard League for Penal ReformThere could not be a more damning indictment of the government's fanatical obsession with justice privatisation than its own performance figures"
An MoJ spokesman said HMPs Thameside and Oakwood were "still in the early stages of their development".
"Experience demonstrates that it takes up to two years for a new prison to develop and embed good working practices that underpin the successful delivery of positive regimes for prisoners," he said.
The spokesman also insisted "decisive action" was being taken to address the concerns raised.
"We are confident that Thameside and Oakwood will deliver the improvements required of them and will become well-run prisons that reduce the risk of future reoffending for the people they hold," he said.
'Significant progress'On Winchester, the spokesman said a performance improvement action plan was in place and "significant progress" had been made.
The National Offender Management Service (NOMS) is responsible for agreeing and publishing annual performance ratings for each prison in England and Wales.
NOMS looks at how prisons have done on public protection, reducing reoffending, decency and resource management and operational effectiveness.
Performance is graded into four bands - four indicates exceptional performance; three means a majority of targets have been met; two indicates overall performance is of concern and one suggest performance is of serious concern.
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