The report names several Indian licensing officials who are "liable for penal action" for not disclosing Cadbury's alleged plan or for allegedly participating in it.

WSJ: India Says Cadbury Used Phantom Factory to Avoid Taxes

Mr Rushdie's latest remarks come amid a rising controversy over warnings of penal action against some authors who read passages from The Satanic Verses - which is banned in India - at the festival on Friday.

BBC: Rushdie: India authorities gave 'false intelligence'

However, in considering potential sanctions, he said the committee must be mindful that the Commons must use its penal powers "as sparingly as possible" and only when action was deemed essential to provide "reasonable protection from improper obstruction".

BBC: News of the World sign

But Frances Crook, from the Howard League for Penal Reform, said the "worrying" inspection report reveals HMP Gloucester needs "urgent action to overcome major problems".

BBC: Gloucester Prison