It said a lack of staff at HMP Winchester has resulted in a “steady deterioration” of the environment and a “noticeable rise in tension”.
There has been an increase in self-harm, assaults on officers and disruptive behaviour, according to the jail’s Independent Monitoring Board (IMB).
Despite the efforts of staff, mobile phones are frequently found in the prison, the assessment said.
The IMB’s report said: “The prisoners who are unemployed are allowed out of their cells for just an hour a day for all domestic activity and association.
“This is neither restorative nor rehabilitative and only adds to the frustration of the prisoners.
“It is entirely due to the resilience and dedication of the whole staff and their leadership that disruptions similar to that reported by other prisons have not yet been repeated in Winchester.”
It noted the jail, which holds about 690 male inmates, has had a level of success in tackling the inflow of drugs, including new psychoactive substances (NPS).
Changes in the patterns of contraband were observed following the outlawing of NPS – previously known as “legal highs” – and the introduction of a smoking ban at HMP Winchester at the end of January.
The IMB report, covering June 2016 to May 2017, said: “There has been a reduction in NPS related incidents and the introduction of tobacco as a competing contraband with other drugs.”