Chilean President Sebastian Pinera unveiled a multimillion-dollar plan Thursday to improve conditions for the country's prisoners after 81 inmates were killed by fire in severely crowded cells.

An inmate looks out of San Miguel prison where a fire killed at least 81 prisoners in Santiago, Chile, Wednesday. Chilean President Sebastian Pinera has announced plans to improve prison conditions. (Aliosha Marquez/Associated Press)

The $460-million US, 15-point program includes purchasing prefabricated cement modular prisons for minimum-security inmates to help reduce overcrowding. Currently, 53,000 inmates are housed in a prison system built for 32,000.

Pinera did not elaborate on other parts of the plan. His announcement came as officials continued the slow process of identifying the bodies of inmates killed in the blaze that broke out early Wednesday in the San Miguel prison, a facility for 700 that housed 1,900 inmates.

Only 31 prisoners had been identified as of Thursday; investigators were using DNA to identify the other 50. Sixteen were hospitalized for smoke inhalation.

The cause of the fire has not been determined, but preliminary investigations indicate it was started by brawling inmates.

The head of Chile's association of prison employees, Pedro Hernandez, told reporters Thursday that the fire might have been caused by portable stoves and flammable materials the inmates used to cook food. He said those items could have been used to make homemade flame-throwers.

Prison overcrowding is severe throughout Latin America, where bureaucratic legal systems have been overwhelmed with suspects since countries began cracking down on drugs in the wake of a 1988 United Nations treaty that urged jail terms for even petty offences.

Many governments haven't invested in improving prisons, where most inmates languish for months or years without trial, said Pien Metaal of the Transnational Institute, an Amsterdam-based think-tank.

Suggestions rejected

Together with the Washington Office on Latin America, a non-governmental organization based in Washington, the institute published a study Thursday on drugs and prisons in Latin American countries.

"Criminalizing personal drug use is the main cause of this overpopulation, so the solutions should start with changing the laws and having fewer people prosecuted for minor offences," Metaal told The Associated Press in a telephone interview.

Interior Minister Rodrigo Hinzpeter on Wednesday rejected suggestions from the country's Roman Catholic Church that the government solve prison overcrowding by giving some of the prisoners amnesty.

Pinera announced his 15-point plan Thursday during the presentation of an annual report by the national Human Rights Institute, a governmental organization created a year ago.

"The overcrowding and inhuman conditions in which people deprived of their freedom live; the insufficient resources for rehabilitation and re-entry into the workplace; and the application of punishments that are contrary to international standards, are examples of the principal violations of rights," said the report, presented by institute director Lorena Fries.

Opposition legislator Ricardo Rincon said the president "should understand that you don't solve this problem by constructing modular prisons, but with a profound reform of the country's entire justice and prison system," Rincon said.

Wednesday's fire was the worst disaster in the history of Chile's penitentiary system, Health Minister Jaime Manalich said Wednesday.

It reached its maximum intensity just three minutes after it started, Hinzpeter said.