The source said prisoners were now on a hunger strike in protest of their treatment.
A Serco New Zealand spokeswoman today confirmed the information.
"There is currently a controlled regime in a single wing accommodating 68 prisoners," said the spokeswoman. "The measure was temporarily imposed on Monday ... for safety and security reasons, and following a review the regime will return to normal tomorrow.
"The regime was applied after two prisoners allegedly assaulted members of staff on the wing on Saturday. The incident was reported to police.
"The prisoners were relocated and will be subject to the internal disciplinary process. Contraband 'homebrew' was also discovered in the wing."
The source said that the prisoners were being locked up for up to 25 hours, and even though the prisoners were there "for a reason" they still deserved fair treatment within the jail.
"But the 23 hours can actually be in 25 hour or more lots, say if they are let out at 9am until 10am one day but not let out until 11am or later the next day.
"They are still entitled to certain things. If they have got the culprits why can't it go back to normal?"
The prison spokeswoman said under the "controlled regime" prisoners were unlocked for less time than they would be normally, but prisoners can still attend visits, work, education, sports and fitness activities.
"The safety, security and wellbeing of staff and prisoners is our first priority. Assaults are never acceptable and our staff must be able to observe and challenge prisoners who are acting to undermine the good order of the prison."
Labour's Corrections spokesman Kelvin Davis said it was yet another example of problems with Serco's operations.
"It goes to show that despite claims to the contrary, that things are happening in Serco that should not be. The guards were attacked by a couple of prisoners yet a whole lot of other prisoners have been punished when they had nothing to do with it.
"By all means, punish the people involved, but [punishing others] does nothing to ease tensions or aid rehabilitation of these prisoners."
Corrections Minister Judith Collins said she was only notified by Corrections today, but that the agency was notified on Saturday.
"Corrections advised me that it was satisfied with the steps Serco took to manage the incident and did not consider it needed to be elevated to me."
She said a report on management at the prison was given to her on April 22.
"It was the first of regular updates that I will receive on the management of Serco. This report states that Corrections believes that [the prison] is well-managed and there are no significant, immediate safety or security concerns."
The incident is the latest in a number of high profile incidents involving Serco, an international outsourcing group, and its operation of New Zealand prisons.
A judicial review into reports of Serco's management of the Mt Eden Correctional Facility is currently underway after its $300 million, 10-year contract with Corrections was terminated following reports surfaced on social media of organised fights and contraband.
Serco took over the management of the Mt Eden remand prison in 2011 and has now agreed to pay $8 million to cover the costs associated with the contract ending.
