Core work, including supervising offenders and writing pre-sentence reports, to be taken out of the public sector.
Core probation services, including the supervision of criminals, are to be put out to competition, in the most arresting example yet of the impact of the "big society" drive on the criminal justice system.
The 35 chief officers of probation have been told they need to examine the "potential for core probation services" to be put up for competition.
Michael Spurr, the chief executive of the National Offender Management Service, has written to chief probation officers telling them: "We intend to examine a range of possible options for service improvements and different models of delivering offender services within the community.
"The aim is to create a long-term direction for probation which is consistent with the government's key objective for reform."
He said it was hoped the competition process would also ensure that those probation functions remaining in the public sector were delivered with clear benefits in terms of costs, efficiency, quality and risk management.
It is not thought that entire probation areas would be turned over to the private or voluntary sector.
It is, however, highly likely that chunks of key probation work – such as supervising offenders in the community and prisoners on release, and writing pre-sentence reports for the courts, including recommendations of what should happen on conviction – will be taken out of the public sector.
So far, the electronic tagging of offenders and the management of bail hostels and other probation support services have been put out to tender, but core probation services have been left untouched.
The Community Justice Partnership – which includes the charities Working Links and Nacro, and the private security company Sodexo Justice Services – immediately said it would be bidding for some of the work.
"This is unprecedented in the justice sector and may be the shape of things to come, as private and charitable bodies come together to provide the scope and scale to successfully deliver end-to-end services in large geographical areas," said Debbie Ryan of Working Links, which works with the long-term unemployed.
Harry Fletcher of Napo, the probation union, said: "Probation services do not lend themselves to the normal laws of supply and demand, it is unclear who the customer is. The government has little if any understanding of how complex work with offenders is and how demanding supervision can be," he said.
"Privatisation so far has been a disaster. Cleaning and maintenance of probation premises was put out to tender several years ago and has hardly been a success story. The privatisation of bail beds was so poor that the contract had to be taken away."
He predicted that selling off the work to the lowest bidder for profit would not raise standards. "Indeed the reverse is the case. The quality of the work will fall and public protection will be compromised," he said.