The interim evaluation of the scheme, which asks young offenders to meet their victims and agree on a reparation plan, was conducted by Queen's University Belfast. It found that almost nine out of 10 youth crime victims were "happy" with the outcome and about one in two young offenders described the scheme as "very satisfactory".
But more than a fifth of young people were not satisfied with the scheme, which has been on trial in Belfast and the Fermanagh and Tyrone areas since December 2003.
Alice Chapman, director of the youth conferencing scheme at the Youth Justice Agency, said: "We are pleased with the findings overall. It showed high levels of participation by victims."
But Jim Auld, director of Community Restorative Justice Ireland, expressed concerns. "A fault of the scheme is the lack of community involvement.
We are also worried that 40 per cent of magistrates have disagreed with the conference outcome and imposed tougher sentences."
The interim report coincided with the publication of the Justice Oversight Commissioner's third report into criminal justice reform in the province.
Lord Clyde's report attacks the Northern Ireland Office for "unacceptable delays" in issuing guidance on the use of restorative justice in the criminal justice system.
The youth conference scheme will be extended to Newry and Armagh in May.
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