Security searches found drugs worth £40,000 and 350 litres of alcohol
Security searches also led to the discovery of 350 litres of illicitly-brewed alcohol known as "hooch" at HMP Garth over the Christmas period.
The training prison in Lancashire holds over 800 adult males.
A report on the jail from HM Inspectorate of Prisons (HMIP) noted that the drug strategy committee at the establishment was "much improved".
It said: "Security searching had yielded several considerable finds: 350 litres of hooch had been found over the Christmas period alone and there had been a recent find of an estimated £40,000 worth of assorted drugs."
The assessment continued: "Despite a coordinated effort to reduce drug supply and demand, very high levels of finds, positive random mandatory drug testing rates and our survey all pointed to a high level of availability of illicit drugs, including new psychoactive substances, diverted medication and illicitly brewed alcohol.
"In our survey, almost half the population said that it was easy to get drugs at the prison, and approximately one in five said that they had developed a drug problem while there – both of which were higher than at the time of the previous inspection."
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The very high level of finds pointed to a high level of availability
The report described NPS – previously known as legal highs – as "particularly problematic", saying they were linked to medical emergencies and prisoner debt and violence.
The drugs – which mimic the effects of illegal substances including cannabis – have been identified as a major factor behind the deterioration in safety seen across the prison estate in England and Wales.
Ministers have unveiled a wide-ranging package of measures to reform jails including the introduction of mandatory drugs testing.
Liberal Democrat justice spokesman Jonathan Marks said: "In this prison alone it seems they had enough hooch to fuel a summer of debauchery.
"Violence in our prisons is out of control. Drugs and other contraband are major factors. Whilst Westminster turns in on itself our prisons remain dangerous places to be – for staff and prisoners."
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HMIP, which visited Garth in January, warned that levels of violence at the jail had increased "substantially" with many incidents linked to drugs, gangs and debt.
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High amounts of illicitly brewed alcohol was found
Assaults on staff had also risen, while dozens of prisoners were held separately because of fears for their safety.
The watchdog did however find the prison had made real progress in work to rehabilitate prisoners.
Chief Inspector of Prisons Peter Clarke said: "This was an unusual inspection of contrasting and conflicting outcomes.
"The progress in rehabilitative work was real and speaks to the potential this establishment has.
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"The prison was, however, one of the most unsafe we have been to in recent times. Violence and drugs dominated the prisoner experience."
Michael Spurr, the chief executive of HM Prison & Probation Service, said: "As the Chief Inspector points out, there is much good work being done at HMP Garth but the deterioration in safety is a serious concern and reversing this is the top priority.
"An experienced senior management team has been appointed to work alongside a new governor to help drive progress over the coming months.
"This will be supported by additional staffing and resources and an improvement plan, which is already in place to address the issues raised in the report."