An opne prison with a history of escapes and drug abuse has been given a month to improve or face being privatised.
The Home Office will decide next month whether to invite private companies to bid to run Ford Open Prison, near Arundel.
The move follows Government concerns about the number of inmates leaving the prison and not returning, failed drugs tests and lack of work for prisoners.
New governor Fiona Radford admitted there were problems that needed to be tackled but vowed to ensure the prison remained in the public sector.
An average of two prisoners a week walk out of the prison and do not come back, giving it one of the worst records in the UK.
The Argus told last December how prisoners were clambering over a broken picket fence, going to the nearby Tesco supermarket in Littlehampton and smuggling alcohol back in.
We also revealed how 50 prisoners who had absconded since 1998 remained at large. Last year 91 inmates left, more than five times as many as in 1994.
Home Secretary David Blunkett promised an inquiry into the open prison system after Bognor and Littlehampton's Conservative MP Nick Gibb raised The Argus articles in the House of Commons.
The Prison Service carried out a review of Ford at the start of this year, setting a series of "performance improvements" to be introduced within 12 months.
But the Home Office has listed the jail for possible "performance testing" - that is, privatisation.
Next month's decision will either mean the prison can go on running itself or would have to bid against private firms for the management contract.
If the Government decides Ford cannot manage itself, the jail would become the tenth prison in the UK to be privately run.
Likely bidders would include Group Four Securitas, famous for a series of high-profile security lapses but which runs prisons at Rye Hill, Wolds and Altcourse.
Other private firms include Securicor, which runs Parc young offenders' institute, and Premier Prison Services, which manages HMP Doncaster and HMP Dovegate.
Since Ms Radford took over, she has stepped up high-profile searches for drugs using sniffer dogs and reorganised some of the prison's resettlement and education programmes.
The proportion of positive drugs tests has fallen from 29.2 per cent in December to 9.1 per cent in February and 12.5 per cent in March.
She also wants to increase inmates' working hours during the day beyond the current eight hours carrying out tasks such as gardening, metalwork and laundry.
Ms Radford said: "We were judged as a prison to be doing okay but there were several things we weren't doing well enough.
"We could be contracted out but I don't intend that to happen. I don't intend us to get anywhere near that.
"There are several things we need to improve, including providing more work for prisoners.
"We weren't doing our drug-testing very well and we weren't meeting our targets. We've got a lot of work to do but we have a very good team. I'm sure they'll start seeing results soon."
Mr Gibb said: "I have met Fiona Radford and we had a long chat about the prison. I know she has a number of management issues she is tackling. I was very impressed.
"I visited several private sector prisons when I was on the public accounts committee and they are very well run. But whether or not it's right for Ford, I really don't know at the moment."
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