Coronavirus sufferers and their contacts will be required by law to self-isolate or face fines of up to £10,000, amid fears the UK is losing control of the virus.
Those on low wages will receive £500 to stay at home as ministers try to break the chain of infection.
The new crackdown comes as Boris Johnson weighs up the introduction of further restrictions amid fears the UK could require a “circuit break” or face death tolls of hundreds a day within weeks.
A further 4,422 cases were recorded in the latest daily tally.
One of the architects of the lockdown, Professor Neil Ferguson, from Imperial College London, has urged ministers to act “sooner rather than later”.
But the introduction of steep fines for breaking strict rules on self-isolation, when people are advised to leave their house only in an emergency, could risk a backlash from sections of the public and some Conservative MPs.
Announcing the new fines, Mr Johnson said: “The best way we can fight this virus is by everyone following the rules and self-isolating if they’re at risk of passing on coronavirus… We need to do all we can to control the spread of this virus, to prevent the most vulnerable people from becoming infected, and to protect the NHS and save lives.”
A holidaymaker who did not self-isolate after returning to Bolton and instead went to the pub has been blamed for part of the area’s “extreme spike” in coronavirus cases.
From 28 September for the first time there will be a legal duty for all those who test positive for Coronavirus and anyone contacted by the NHS Test and Trace programme to stay at home.
New fines for breaching the rules will start at £1,000, but rise to up to £10,000 for repeat offences.
Those who prevent others from self-isolating could also face an up to £10,000 fine.
To ensure compliance NHS Test and Trace staff will regularly call those supposed to be at home.
Any concerns they have can be “escalated” to police, sources said.
Officers will also be able to intervene if they receive intelligence of someone breaking the rules, raising the prospect that people will be shopped by their neighbours.
Sources said it was an offence to provide NHS Test and Trace with false details of contacts, amid fears some could try to use the new laws maliciously.
They also said evidence showed the main reason people did not volunteer their contacts were fears they would not be able to absorb the economic cost of an enforced two week stay at home.
This was one of the reasons the new £500 for those on low wages had been introduced, they said.
Since May, ministers have been telling those who test positive for coronavirus and their contacts to stay at home. But the previous advice was merely guidance, not the law, and not enforceable with fines.
However, there have been fines for those who fail to quarantine after returning from countries not on the government “air corridors” list.
Government sources did not deny that Mr Johnson was holding discussions on the government’s fightback against the pandemic this weekend, but sought to downplay their significance, saying the prime minister had meetings on coronavirus every day.