The government has updated its guidance on how the “good character” requirement should be applied to children in citizenship applications, but campaigners say the move does not go far enough and are calling for it to be scrapped entirely.

Campaigners had previously criticised the guidelines for failing to differentiate between young people who had grown up in the UK and wanted to register as British citizens, and adult arrivals looking to naturalise.

In the updated guidance (pdf), caseworkers have been told to take into account “the child’s age and particular circumstances and any mitigating factors such as their ability to understand the consequences of their actions”.

The Guardian reported last year that hundreds of children, some as young as 10, who were born or who grew up in the UK were having their applications for British citizenship denied on the basis of convictions for crimes such as petty theft.

Over the past five years, an average of one child a week had their application rejected. Campaigners have estimated that as many as 500 children have had their application rejected for failing to satisfy the good character requirement since it was introduced in 2006.

The updated guidelines respond to the 2017 review of the good character requirement by David Bolt, the independent chief inspector of borders and immigration, which called on the Home Office to review the guidance and ensure it “makes explicit the scope for caseworkers to exercise discretion”.

“Sticking a couple of poorly drafted paragraphs mentioning children into a 50-page guidance about naturalisation of adult migrants is not what was required by the chief inspector’s recommendation that has been sat on for well over a year,” said Solange Valdez-Symonds, the director of the campaign group the Project for Registration of Children as British Citizens (PRCBC).

Last year, PRCBC, Amnesty International and the Runnymede Trust launched a campaign to scrap the good character requirement in child citizenship applications. In a briefing circulated to MPs, they noted: “Excluding children from the citizenship of the country of their home, and the only country they know, is not in the best interests of any child.”

Valdez-Symonds added: “These children have rights to register as British citizens, having grown up in this country and in many cases having been born here too. The refusal to recognise this with specific guidance on these children’s statutory rights to British citizenship is irresponsible, insulting to children and in complete disregard of the home secretary’s duties to protect and promote their best interests.”

Dr Zubaida Haque, the deputy director at the Runnymede Trust, said the amended guidance was just the first step for black and minority ethnic people. She said: “Ultimately it’s necessary to repeal the good character statutory requirement in relation to those registering their citizenship because all the evidence suggests that it is racially discriminatory and affects vulnerable BME children and adults disproportionately.”

A Home Office spokesperson said: “All citizenship applications are assessed on their individual merits. In the case of applications from children, the child’s best interests are always a primary consideration in decision making. The good character requirement applies to those aged 10 and over as that is the age of criminal responsibility.”