There were 7,450 people in prison on 25 December last year compared with 7,923 on Christmas Day 2011, figures obtained by the Scottish Liberal Democrats show.
Proposals to hand out more community-based punishments to those sentenced to less than a year could see 1,000 more convicts on the streets on Christmas Day, according to the Lib Dems.
But the party is concerned the existing presumption against prison for those serving less than three months is not working effectively, with 162 such short-term convicts in jail last Christmas.
Lib Dem justice spokeswoman Alison McInnes said: “Last year over 100 prisoners sentenced to jail for three months or less spent Christmas behind bars despite a presumption against these short-term sentences. The Scottish Government recently carried out a public consultation into whether the presumption should be extended to cover sentences of a year or less.
“Such a change could lead to 1,000 fewer people spending Christmas in prison and instead serving tough community-based sentences.
“Scotland has one of the highest prison populations per capita in western Europe but many are only there for a short period of time.These are people Henry McLeish’s Prisons Commission concluded were ‘more troubling than dangerous’ and their being sent to prison distracts the Scottish Prison Service from engaging with more serious long-term offenders.
“Thousands of children are needlessly left behind each year because their mothers and fathers are given ineffective and disruptive short-term stints in prison. Alternatives such as community-based justice programmes are often more successful in reducing reoffending.
“They are not soft options but they do help to preserve familial links and to limit the damage on dependent children.
“These new figures highlight that we need to keep pursuing change to the community justice system and in the new year I’ll continue my work with the Justice Committee to ensure the Community Justice Bill makes community sentences a more attractive option for judges.”
The nation’s prison population has grown by about a third since the start of the new millennium, from 5,803 in 2000-01 to 7,647 today.
The Scottish Parliament passed legislation in June to end automatic early release for prisoners jailed for more than four years.