Masked and armed prisoners took control of an open prison within half an hour of turning on staff, a court heard.
The mutiny at Ford Prison, Arundel, West Sussex, saw inmates running amok, looting, smashing and torching buildings and property during the early hours of 1 January, 2011, a jury at Hove Crown Court was told today.
Lee Roberts, 41, Thomas Regan, 23, Ryan Martin, 25, Lennie Franklin, 23, Roche Allen, 25, Paul Hadcroft, 25, and Carneil Francis, 25, all deny a charge of prison mutiny.
Roberts, Martin, Franklin, Allen, Hadcroft and Francis have also pleaded not guilty to a charge of violent disorder.
Roberts, Regan, Martin, Franklin, Allen and Hadcroft deny a further charge of arson, being reckless as to whether life was endangered.
Regan has pleaded guilty to violent disorder and Roberts has pleaded guilty to arson of the association block, the court was told.
Prosecutor Ian Acheson said resentment had grown among inmates over alcohol breath testing which had taken place in the run-up to New Year's Eve in December 2010.
He said the resentment culminated in tension erupting at he turn of new year and the five staff in charge being overpowered.
The jury heard that by the time the authorities were back in control of the prison 12 hours later, more than £5 million of damage had been caused.
Acheson said: "It's the prosecution's case that each of these seven defendants was involved in this prison mutiny, wherein violent chaos and arson ruled."
He said in the run-up to New Year's Eve resentment had been brewing over the breath tests.
Empty alcohol bottles had been found inside and outside the prison and inmates had failed breath tests on previous occasions, he added.
The issue was reinforced to staff who were covering the night shift on New Year's Eve, he said.
At 9.45pm on New Year's Eve night, orderly prison officer Colin Usher and his assistant David Evans began a patrol of B wing, the court heard.
They heard loud music coming from one of the billets and found the door had been wedged shut from the inside.
Inside were three men, who were not the defendants, and two empty brandy bottles, Acheson said.
The men were breathalysed and warned they would be reported but were left to carry on celebrating the new year, the court heard.
Acheson said Regan stuck his nose in and became angry at the situation so it was decided the inmates would be allowed to come out of their billets on their wing to wish each other happy new year, but they would not be allowed to cross from one wing to another.