LONDON (Reuters) - Drone deliveries of drugs and weapons into British prisons have become a national security threat, the country's chief prisons inspector warned on Tuesday, calling for urgent action to tackle thriving illegal activity inside jails.

At Manchester Prison in northern England, inmates were burning holes into windows to receive drone deliveries of large payloads with the potential to cause serious disruption or escape, Chief Inspector of Prisons Charlie Taylor said in a report.

Drone activity around British prisons has become increasingly common in recent years despite restricted fly zones around prisons being introduced a year ago.

Jails also face an overcrowding crisis and a record prison population in Britain, which has western Europe's highest incarceration rate.

Taylor's warnings follow inspections in September and October of two of Britain's most violent prisons - Manchester and Long Lartin in central England.

Both had "thriving" illicit economies of drugs, mobile phones and weapons, while basic security measures such as protective netting and CCTV had fallen into disrepair, Taylor said.

"It is highly alarming that the police and prison service have, in effect ceded the airspace above two high-security prisons to organised crime gangs," he said.

"The safety of staff, prisoners and ultimately that of the public, is seriously compromised by the failure to tackle what has become a threat to national security."

Taylor described conditions at the two prisons as "grim", noting widespread dirt, damp and litter, and a chronic rodent infestation at Manchester, where prisoners were also using torn-up foam from mattresses to keep warm and 39% had tested positive for drugs.

At Long Lartin, inmates without in-cell toilets used buckets in their cells and threw bags of excrement out of the windows, which were often not cleared up, the chief inspector said. About half of the prisoners there said in a survey it was easy to get drugs and liquor.

Britain's Ministry of Justice said new netting and a CCTV system were being installed at Manchester.

"We are gripping the situation by investing in prison maintenance and security, working with the police and others to tackle serious organised crime, and building more prison places to lock up dangerous criminals," a spokesperson said.

(Reporting by Sachin Ravikumar; Editing by Kate Holton)