A database to track offenders through the prison service will be scaled down and delivered at least two years later than planned.
The Ministry of Justice (MoJ) now hopes to begin the roll-out of the system, known as C-NOMIS , sometime in 2009.
“The C-NOMIS programme has not been cancelled, but revised to ensure it provides best value for money,” said an MoJ spokesman.
An official report into the murder in 2000 of Zahid Mubarek by a fellow prisoner said it was crucial to provide better inmate data to prison and probation staff.
The 2006 report said the first phase of the system would be in place by November 2007. But MoJ halted the rollout of C-NOMIS last August, as it emerged it would cost at least £500m more than double the original £234m budget.
Last year prisons minister David Hanson told MPs that the project would be scaled back and only introduced in prisons.
The government was keen to salvage the programme to prevent paying compensation supplier EDS if the contract was cancelled.
The MoJ hopes the rollout to 140 prisons will begin in January.
“The legacy systems are slow and prone to crashing it now seems we will continue to have to use them until at least 2010,” said Harry Fletcher, assistant general secretary of probation officers’ union Napo.
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