The Tasmanian government ignored warnings of rising tensions at Risdon Prison prior to an eight-hour stand-off between 40 inmates and warders, a union for the prison's workers says.
Acting Secretary of the Community and Public Sector Union Thirza White said they flagged concerns several days before a protest on Wednesday.
Inmates held a banner reading "basic human rights" and at midday refused to return to their cells.
The stalemate went into the evening until a tactical response unit used a chemical similar to tear-gas to disperse prisoners.
"Less than 72 hours prior to this incident we were really clear something like this was going to take place," Ms White said.
"Correction officers have been raising their concerns about a rising prison population, more importantly a lack of staff."
One prisoner suffered a minor cut, but no staff were injured in the stand-off.
The government has blamed the unrest on inmates being annoyed about the phasing out of nicotine patches.
But Prisoners Legal Service chairman Greg Barns believes the agitation was due to overcrowding.
The prison, designed to hold 550 people, is currently housing more than 600 with many sharing cells, he said.
"Prisoners only get an hour out of their cells a day when there are lockdowns," he said.
The riot has ignited a political war of words, with Labor leader Rebecca White accusing Acting Corrections Minister Guy Barnett of failing to listen to concerns the prison was becoming a "pressure cooker".
Mr Barnett defended the use of the tactical response group and said the prison is operating at 93 per cent capacity.
"This is a prison. This isn't a holiday destination," he said, adding there would be a full investigation into the incident.
Facilitating nicotine treatment for inmates, which is in the process of being phased out, will be reviewed by the government.
It intends to add more than 80 beds to the prison later this year, and is planning to open a new jail in the state's north.