The sentencing review will be led by David Gauke, a former Conservative justice secretary.
His report, expected next spring, will look at replacing short prison sentences with new forms of community punishment and using technology to improve rehabilitation.
Officials have already been looking at expanding the use of successful “sobriety tags” that monitor if an offender drinks alcohol.
They also want to look at the case for smart watch-like devices, piloted in some parts of the US, which send “nudge” messages to offenders.
Trials have indicated they can improve how ex-offenders, who often live chaotic lives, comply with their rehabilitation.
Mahmood said the review would learn from other jurisdictions, including Texas, where the prison population has shrunk and the state government has closed prisons.
She said she would “not countenance” any further early releases and would consider a number of measures while the review was underway, including:
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Extending the use of home detention curfew including increasing the maximum time someone can be on it from six months to 12 months
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Reviewing the process for offenders recalled to custody while out on license
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Exploring options for making the early removal scheme for foreign national prisoners more effective
Mahmood said that whatever the final proposals, there should always be a cell available for dangerous offenders – a duty the system came perilously close to failing to meet this summer when it was down to less than 100 available spaces.
