G4S has been selected to run a new mega prison, it is understood.

The company is the preferred choice to be awarded the contract for the new category C HMP Wellingborough in Northamptonshire, which cost £253 million to build and is set to hold 1,680 criminals, sources told the PA news agency.

The decision, which is yet to be ratified and could still be challenged by other companies vying for the job, comes after G4S was last year stripped of its contract for running Birmingham prison seven years early.

The jail, one of the largest in the country, was taken back under state control having plunged into crisis under private management, according to a damning report by the chief inspector of prisons Peter Clarke.

His findings detailed scenes likened to a war zone in which inmates walked around “like zombies” while high on drugs and flouted the rules with impunity.

G4S also pulled out of running Brook House immigration removal centre near Gatwick Airport and the Medway secure training centre in Kent after BBC’s Panorama programme broadcast undercover footage of inmates and detainees allegedly being mistreated.

But the company also runs four other prisons, Altcourse, Parc, Rye Hill and Oakwood, all of which have won praise from inspectors.

An announcement confirming the Wellingborough decision is expected in the coming weeks, subject to any appeals lodged.

Building work began in September on the so-called “mega” prison which is due to open next year on the site of the former jail which closed in 2012.

The project is described as a flagship example of the Government’s aim to create a “modern, efficient prison estate that is fit for the future”.