The radicalised teen who allegedly carved an ISIL slogan into the forehead of a former digger in a NSW prison was a maximum security inmate who should have never been in the same cell as the ex-soldier.

Bourhan Hraichie, 18, allegedly carved "e4e" into his cellmate's head, an apparent reference to ISIL's "eye for an eye, tooth for a tooth" mantra, after lockdown at Kempsey prison on Thursday afternoon.

NSW Corrective Services Commissioner Peter Severin told reporters in Sydney today that Hraichie should have been placed in a high-risk management correctional centre and should not have been sharing a cell with the former solider, who was a low security inmate.

"If you are radicalised and at risk of engaging in violent extremism, you need to be locked up," Mr Severin said.

"You need to be very highly controlled."

Public Sector Association spokesman Steve McMahon said the department had not taken Hraichie's extremist views seriously, and should have placed him in segregation.

"The 18-year-old, in our belief, had presented enough information and bad behaviour to have been segregated, or at the very least, been put in a single cell," Mr McMahon said.

Mr Severin said Hraichie has been transferred to a high-risk management correctional centre and the general manager of the prison, Greg Steele, had been stood down.

Hraichie is also accused of placing a towel over his 40-year-old cellmate's face and pouring boiling water onto him.

The former soldier was rushed to Port Macquarie hospital with serious injuries to his head and sternum and burns to his face.

Hraichie has been charged with causing grievous bodily harm and choking.

A full investigation into the management of radicalised prisoners will be launched in the wake of the alleged attack.

Corrections Minister David Elliott said he was outraged by the incident.

"I will ask the Inspector of Custodial Services for a full and thorough investigation of the management of radicalised prisoners in the system, including the assault," Mr Elliott said.