The 16-bed Josephine Butler Unit in the Surrey prison was labelled "impressive" by the chief inspector for prisons Anne Owers.
She found that inmates spent most of their weekdays out of their cells and were involved in a wide range of activities and studying. Resettlement work through links with the YMCA was also praised, as was the strong relationship between inmates and staff, who "set high expectations for their behaviour".
Bullying was kept to a minimum and those at risk of self-harm were "well cared for".
Owers said: "The unit is a good example of what can be achieved with some challenging and needy young women, in those few cases where custody is deemed necessary."
However, inspectors and the Howard League for Penal Reform are both concerned about the use of Downview's adult segregation facilities for some of the unit's most vulnerable young inmates with mental health issues.
"Punishing children for being mentally ill by forcing them into adult segregation units is barbaric and counter productive as girls leave prison more damaged than when they went in," said Frances Crook, director of the Howard League for Penal Reform.
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