Mental health staff to be based in police stations
Mental health nurses are to be based in police stations and courts in 10 areas of England as part of a pilot scheme aimed at cutting reoffending.
The nurses' duties will include helping officers to respond to calls and identify those with problems.
Ministers said "too often" criminals with mental health problems were being diagnosed only once they reached jail.
The £25m scheme - being trialled in areas including London and Merseyside - could be extended England-wide by 2017.
Support and treatment
The Department of Health says most people in prison have a mental health problem, a substance misuse problem or a learning disability, and one in four has a severe mental health illness such as depression or psychosis.
It has been estimated that police officers spend 15% to 25% of their time dealing with suspects with mental health problems.
Being diagnosed with a mental health, learning difficulty or substance abuse problem will mean people can be offered treatment or support, and could affect how they are dealt with by the criminal justice system, ministers say.
The pilot mental health "liaison and diversion" teams will run in:
- Avon and Wiltshire
- Sunderland and Middlesbrough
- South Essex
Similar arrangements have already been successfully tried in Leicestershire and Cleveland.
Health minister Norman Lamb told BBC News: "There are so many people in our prisons with mental health problems which haven't been diagnosed and yet, if we diagnose them and deal with them, we can reduce reoffending.
"It just makes so much sense from everyone's point of view."
Policing minister Damian Green added: "Police officers should be focused on fighting crimes and people with mental health conditions should get the care they need as early as possible.
"These pilots will not only ensure that happens but, in the longer term, will help drive down reoffending by individuals who, with the right kind of treatment, can recover fully."
Paul Jenkins, chief executive of the charity Rethink Mental Illness, said: "All too often, the way our criminal justice system deals with people with mental health problems leads to poor outcomes for individuals, frustration from police officers, magistrates and others, and such a waste of resources as people are needlessly sent to prison through a failure to respond to some of the underlying issues in their lives.
"We welcome this initiative, which has the potential to stop people going unnecessarily to prison, reduce reoffending rates and save millions in taxpayers' money.
"This scheme may not be a panacea, but these liaison and diversion teams are definitely the best opportunity we've had to do things differently."
Dr Peter Carter, general secretary of the Royal College of Nursing, said the organisation had been involved in developing the scheme alongside the government.
He added: "Nurses bring vital skills and knowledge to these complex and challenging cases and we know that the police greatly value working in partnership with nursing staff.
"Having more nurses in liaison and diversion services will improve the health care that people in the criminal justice system receive and it will also support the police's public protection work."