Prisoners in England and Wales should work a 40-hour week, Justice Secretary Ken Clarke has said.
Mr Clarke made the announcement to the Conservative Party conference in Birmingham on Tuesday.
He said the government will begin a major expansion of prison industries to get more inmates working.
The Prison Reform Trust said there were questions about what would happen to disabled prisoners but welcomed the idea of people gaining work skills.
BBC home affairs correspondent Danny Shaw says it is understood discussions have already begun with a large number of private companies about increasing the number of job opportunities in prisons.
Ministers are also considering building a large-scale "working prison" on the site of a factory, possibly a recycling plant.
Mr Clarke's aim is for inmates in publicly-run prisons to work a 40-hour week, for which they would be paid the minimum wage, with part of their earnings going to victims.
But officials are aware that any move to provide prisoners with work must not be at the expense of local jobs and businesses.
In his speech Mr Clarke said jail is a place of "sluggishness and boredom" for many prisoners, where getting up in the morning is "optional".
He wants offenders to prepare for life on the outside by establishing the habit of "routine hard work".
He said he had never been in favour of "molly-coddling" prisoners or offenders but the current system was failing society, as the prisons were full of people with mental health and drug problems.
Married couples 'to get tax break by 2015'
Chancellor George Osborne announced on Monday that from 2013 child benefit would be removed from families with at least one parent earning more than about £44,000 a year.
But critics said it would be unfair, because families with two earners, each paid just under the threshold, would still be eligible while those where only one parent works would be hit.
In a letter to Conservative MPs on Tuesday, Mr Osborne said he knew higher-rate taxpayers - those who, by 2013, will be on about £44,000 a year or more - were not "super rich".
But he added: "At a time like this it is very difficult to justify taxing people on lower incomes to pay £1bn in benefits to households that contain higher rate taxpayers."
He also stressed the child benefit cut should "not be seen in isolation" adding: "Other policies contained in the coalition agreement will help families, including our commitment to introduce transferable allowances for married couples."
In April the Conservatives outlined their plans to give four million married couples and civil partners an annual £150 tax break. It would have applied to basic-rate taxpayers earning under £44,000 where one partner did not use their full personal tax-free income allowance.
They would have been allowed to transfer £750 of their tax-free personal allowance to their working partner.