The Cabinet is today expected to give a big tick to legislation that could see most, if not all, of the country's prisons - rather than just newly built ones - run by private companies.
Ministers' approval of the legislation will up the pressure on the problem-plagued Corrections Department to lift its game - presuming the Government allows the department to tender for management contracts in the first place.
The Cabinet's decision comes on the same day as State Services Commissioner Iain Rennie is due to present his report assessing whether Corrections chief executive Barry Matthews is accountable for departmental failings in its management of parole.
There is concern within the Government that Mr Rennie may sheet home responsibility for the serious lapses in monitoring offenders on parole to senior officials reporting to Mr Matthews and absolve the chief executive himself of blame.
The timing of the Cabinet's consideration of a bill that is understood to extend tendering for management contracts to existing prisons may therefore not be coincidental.
National's law-and-order policy allows for competitive tendering for contracts to run prisons on a "case-by-case basis", but is not more specific.
The indications had been that the policy - based on National's view that the private sector can do the job better and more cheaply - would apply chiefly to new jails.
The details of the bill have yet to be made public - it will be tabled in Parliament this week. It is conceivable the Government might exclude management of medium- and maximum-security prisons like Auckland's Paremoremo from going out to tender - at least in the short term.
But it is clear the Government intends to proceed with privatising prison management where possible, as fast as possible.
Corrections Minister Judith Collins is understood to be meeting Australian-based representatives from the Geo Group, a United States company that also runs "correctional facilities" in Canada, Britain and South Africa, where it manages and maintains a maximum-security jail.
The Geo Group managed the Auckland Central Remand Prison for five years after the last National-led Government allowed private operators to tender for contracts to run new prisons. The company's contract was not renewed because Labour, opposed to the private sector operating prisons, passed legislation in 2004 making management of jails solely the job of the Crown.
The State Services Commissioner's report, which Ms Collins sought following a damning inquiry by Auditor-General Kevin Brady into how well Corrections was managing parole arrangements, is expected to be delivered to the minister's Beehive office this morning.
Mr Matthews' retaining his job would likely be interpreted as an embarrassment for Ms Collins, who sent strong signals to the commissioner that she wanted him out by refusing to express confidence in her chief executive.
However, the minister is handicapped by the commissioner being Mr Matthews' employer. She cannot order Mr Rennie to remove him from the job.
She will either have to tell the commissioner she can no longer work with him, which would force a change, or back off and accept Mr Matthews remaining in his job.
Much hangs on how the commissioner responds to Ms Collins' request that he lay out what he thinks needs to be done to restore public confidence in Corrections - and whether she is satisfied with the answer.