One in eight prisoners has developed a drug problem after being locked up in jail, inspectors have said.
A poll of a quarter of all inmates at Durham Prison last year found 13% had developed a problem with drugs since being held in the category B local prison.
The critical inspection also found that up to a third (33.3%) of prisoners were failing random drugs tests, more than a third (36%) thought it was easy to get hold of drugs and almost one in five (18%) thought they would still have a problem after being released.
Nick Hardwick, the Chief Inspector of Prisons, warned not enough was being done to tackle the problem which was linked to bullying and self-harm.
The survey of 216 of the 928 prisoners (23%) at the North East jail last September found that, on average, one in five inmates (21.7%) tested positive during random drugs tests in the six months to August last year. But this rose to 33.3% in both February and June, the figures showed.
"HMP Durham ... has improved and some of the developments and new services it has in progress, in resettlement and purposeful activity for instance, are very promising," Mr Hardwick said.
"However, there are some areas, such as combating the supply of drugs, making sure prisoners get to activities, addressing diversity issues and taking a whole prison approach to resettlement, that we did not detect were being addressed with sufficient vigour."
Michael Spurr, chief executive of the National Offender Management Service, said: "I accept that there is more to do, especially with regard to drugs, and the governor and his staff will focus on the areas identified for further improvement."
Juliet Lyon, director of the Prison Reform Trust, said that, while the report was "not all bleak", it showed that Durham Prison is "another in a line of Victorian jails buckling under overuse of remand, recalls and short sentences".
Ms Lyon added: "Arguably use of effective community penalties and an end to overcrowding, rather than the added pressure of competitive tendering, would enable Durham jail to enter the 21st century."