Speaking ahead of an Assembly debate on the issue, Mr Dallat said: "The economic benefit of Magilligan Prison to East Derry cannot be overstated with many local businesses depending on the trade which they get from the institution.
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"It is also a big employer for local people and if it were to close, it would destroy the livelihoods of many families in our communities.
"As well as being of immense economic value to the north-west, the Prison also operates some excellent outreach and educational projects for inmates to rehabilitate them for their release into society.
"We, in the SDLP, have serious concerns that if the Prison were to shut, its progressive ethos would also be abolished to the detriment of society.
"This forward-looking approach which exists at Magilligan is a model of excellence for other prisons and must be retained."
(CD)
