A landmark project to reintroduce an extinct bumblebee to the UK is celebrating its first milestone after experts confirmed that queens have nested and produced young.

Over two years, conservationists have made two releases of short-haired bumblebee queens (Bombus subterraneus) at the RSPB's Dungeness reserve in Kent, in an attempt to establish a viable breeding population. They have now recorded seven young worker bees in a four kilometre area – the first to be seen in the UK for 25 years.

Dr Nikki Gammans, who leads the Short-Haired Bumblebee Reintroduction project, said: "This is a milestone for the project and a real victory for conservation. We now have proof that this bumblebee has nested and hatched young and we hope it is on the way to becoming a self supporting wild species in the UK once again."

The short-haired bumblebee has not been seen in the UK since 1988 and was declared extinct in 2000. The species was once widespread across the south of England, feeding on wildflowers such as white deadnettle and red clover. But it began to decline in the second half of the 20th century as wildflower-rich grassland, which the bees needed to forage and thrive, was lost to intensively farmed land.

Previous efforts to reintroduce the bee in the UK have not fared well. In 2009 scientists tried to transport queens from New Zealand, where a small population had clung on in the South Island. But DNA tests found the colony lacked genetic diversity and many of the queens died before they made it out of quarantine.

So scientists turned to Skåne in southern Sweden, where the short-haired bumblebee is found in good numbers. Gammans led a team of scientists and volunteers to collect 100 queens, but the first generation, with 49 released in 2012, struggled in the cold wet conditions of last summer and none has been seen since.

In June this year, more Swedish queens were released on the site, with the first worker bees spotted in July. They were seen carrying pollen, meaning that one of the released queens had successfully started a colony.

Gammans said: "I was out with two volunteers, and one is a photographer so we managed to get a picture. We were walking round a field we'd specially created, finding lots of other rare species. I caught a bee that looked a bit different and on inspection we realised it was a short-haired. We were absolutely ecstatic because we didn't know how long it would take to see workers. But we created a good habitat, and they responded to that, and the good weather means it's been a fantastic year for bees."

The scientists waited until now to verify the results using DNA samples and ensure the habitat was not disturbed. Further releases are planned as the project continues to build up the population, and scientists will be able to tell which workers came from which queen.

"Seeing worker bees for the first time is a fantastic reward for all that hard work, but we still have a way to go to ensure this population is safe and viable," Gammans said.

The project, which is backed by government conservation agency Natural England and wildlife groups the RSPB, Bumblebee Conservation Trust and Hymettus, has involved four years of groundwork with farmers to create flower-rich meadows and field margins in Dungeness and Romney Marsh.

As well as the short-haired bumblebee, the conservation work has also resulted in increased sightings of other rare bumblebee species including the ruderal bumblebee, the red shanked carder bee, the moss carder bee and the brown banded carder bee.

Bees in the UK continue to suffer declines due to a loss of habitat, with 98% of flowering meadows in Britain lost in the last 60 years. Of 25 native bumblebee species, seven are in decline and two have been declared extinct, including the short-haired bumblebee.