LANCASTER Castle prison could be closed amid government claims it is "unfit for the 21st century."
Talks have begun to close the historic jail, which has tried and held prisoners since the 12th century.
The building, which is also a popular tourist destination, currently houses around 234 Category C offenders.
"The New Prisons Programme give
s us the chance to release parts of our estate that are plainly unfit for the 21st century and that includes HMP Lancaster Castle," said justice minister Crispin Blunt in Parliament last week.
A Ministry of Justice spokesman said: "While it is performing well it is outdated and expensive to run.
"We need prisons to be places where staff are able to effectively rehabilitate prisoners to stop them re-offending, and where capacity requirements are met more efficiently to improve value for money for the taxpayer."
If an agreement is reached to return the prison to the Duchy of Lancaster, staff would be redeployed and prisoners placed in more suitable accommodation.
City council leader Stuart Langhorn said the move could attract significant private sector investment and would be a "highly valued" development for Lancaster.
Lancaster MP Eric Ollerenshaw said: "There is a huge potential to develop Lancaster's heritage and tourism possibilities. It could provide a big lift and attract more people and money to the city."
And Lancaster District Chamber of Commerce's president Jon Price added: "The idea of having Lancaster Castle as a major visitor attraction is fabulous. The knock-on effect would stimulate the shops and the district as a whole."
A Duchy of Lancaster spokesman refused to be drawn on possible uses for the castle if the prison closed.
