Responding to calls from Parliament's Welsh Affairs Select Committee for the powers to be handed over, the Government said the move would result in a postcode lottery in youth justice.
"In practical terms, separation (of powers) would make economies of scale difficult and create perceptions of institutionalised justice by geography," said the Department for Education and Skills in a written response on behalf of central government.
The Welsh Assembly said the Government's stance would not affect its plans for an All-Wales Youth Offending Strategy.
Gareth Hughes-Jones, manager of Gwynedd and Ynys Mon Youth Offending Team, said youth justice was developing independently in England and Wales regardless of whether power was devolved.
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