The number of young people in custody in England and Wales has reached a crisis, prompting warnings that the system is in "meltdown".
The Youth Justice Board revealed yesterday that 3,350 youngsters were being held and immediate action was needed with just a handful of beds now available.
The Home Office said the use of custody for children under 18 was a last resort.
It said that of the 190,000 young people dealt with by police every year, only four per cent resulted in a custodial sentences.
Rod Morgan, chairman of the Youth Justice Board, said: "The youth justice system has just a handful of bed spaces left.
"We can’t simply put up a sign saying 'No Vacancies’. Action is urgently needed to stop custody for young people going into meltdown."
A Youth Justice Board spokeswoman said the high number of youngsters being held meant increasing numbers were being forced to share cells, which many believe increases the potential for violence.
Earlier this month, a nine-hour riot involving more than 30 inmates at Stoke Heath young offenders institution near Market Drayton, Shropshire, saw an entire wing put out of action.
Young people are also being transported around the country. The board claim dozens of children and youths from London are held as far afield as South Yorkshire and the Scottish borders, contravening rules that young offenders should not be held more than 50 miles from home.
A Home Office spokeswoman said: "Public protection is our priority and we support tough sentences for those judged to be a danger to the public.
"Flexible community orders are a flexible alternative to prison for lower level offenders. Custody for under-18s is a last resort.
"The Youth Justice Board has helped drive up standards for youths in custody, including minimum periods out of their cell and placing far stronger emphasis on education and training."
Chief Inspector of Prisons Anne Owers said: "Every time I go into a custodial establishment, I see staff achieving amazing things in difficult circumstances with highly troubled young people.
"But I fear the system is approaching breaking point. And I am particularly concerned about the number of young people with mental illness who end up in our prisons because of the lack of adequate provision outside."
A rising adult prison population in England and Wales has led to prisoners being held in police cells, and the Home Secretary has announced plans to use prison ships.