The Independent Monitoring Board for mid-Somerset's jail has voiced worries over proposed new budget cuts and an increase in prisoners.

The news is revealed in the prison watchdog's annual report.

On top of the cuts totalling £350,000, the board has also voiced concerns over proposals to increase the prison population from 189 with an extra 70 more prisoners coming in this year.

"We very much concerned at the proposed budget cuts, and the impact that this will have on both the staff and inmates of the establishment," said Richard Brown, chairman of the Independent Monitoring Board.

But the board also states in its Annual Report for 2009-10 that despite the budget cuts and being the oldest prison in the country, HMP Shepton Mallet continues to be well run with dedicated prison and civilian staff.

The prison, which is 400 years old and gearing up for its anniversary celebrations, has suffered from budget cuts over the past three years, with more expected this year, resulting in reduced educational and work opportunities for prisoners, says the report.

"It is a tribute to the management and staff that many of the budget cuts have been absorbed without even greater impact on the daily running of the establishment," says the report.

"However we are very concerned that further cuts in budgets will result in a reduction in the quality of service that the prison can provide. We would welcome assurance that there will be no further cuts to prison budgets."

The report also states the board's worry that the increase in prisoners would have a "deleterious impact on a very successful prison" and put a strain on existing facilities. "We are concerned that this will lead to a breakdown in the existing harmonious relations which provide an excellent environment for prisoners to progress in their sentences," the report says.

The closure last year of the Aramark Distribution Centre in Shepton meant the loss of 20 activity places for prisoners. And the planned sewing shop due to open last summer still remains uncommissioned.

But the report also points out that even a reduction in teaching time did not deter the 189 prisoners housed there from clocking up more 400 separate qualifications in the last academic year.

It is a Category C prison, which means it caters for long-term offenders. Almost 40 per cent of the prisoners are aged over 50 and 23 per cent are on the Disabled Prisoners Register.