MPs and campaigners have called for the government to scrap the “good character” requirement in child citizenship applications.

In a briefing circulated among MPs, Amnesty International, the Runnymede Trust and the Project for Registration of Children as British Citizens (PRCBC) warn of the “dramatic and severe” consequences of young children being blocked from obtaining citizenship for minor crimes.

“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. It impedes the rehabilitation and reintegration of children who become caught up in the criminal justice system,” the briefing states.

Last month the Guardian reported that hundreds of children as young as 10 who were born or have spent most of their lives in the UK are having their applications for British citizenship denied on the basis of convictions for crimes as trivial as petty theft. Offences that are punished with a caution or a fine are considered serious enough to fail the good character test.

Over the last five years an average of one child a week has had their application rejected. Campaigners estimate that as many as 400 have been denied citizenship for failing to satisfy the good character requirement since it was introduced in 2006.

Solange Valdez-Symonds, the director of the PRCBC, said the intention of the 1981 British Nationality Act was to remove the principle of birthright citizenship but still protect children who had a close connection to the UK.

“It was accepting that these children shouldn’t be totally stripped away from the right of citizenship,” she said. That right had been severely restricted by the 2006 Immigration Act, which was rushed through parliament, she added. “Those debating the changes weren’t really alerted to the damage it was going to cause.”

Valdez-Symonds said the time had come for parliament “to right a wrong” and for the law be changed.

Zubaida Haque, the deputy director of the Runnymede Trust, said: “We’re really concerned about the good character requirement because we know from the evidence in relation to the criminal justice system that black and ethnic minority children and young people are more likely to be involved and discriminated.”

Campaigners have also criticised guidelines on the good character requirement for failing to differentiate between young people who have grown up in the UK and want to register as British citizens and adult migrants looking to naturalise.

The Home Office promised to publish revised guidelines to make it clear that the child’s best interests must be a primary consideration in assessing these applications, but campaigners argue this does not go far enough.

Haque said the problem with using a bespoke guideline for young applicants was that it was based on contact with the criminal justice system and would still disproportionately affect black and minority ethnic children. “How would they make it work so these children are not disproportionately affected by the good character requirement? That’s why we want it scrapped,” she said.

Steve Valdez-Symonds, Amnesty’s refugee and migrant rights programme director, said: “What you have are people who grow up in this country as British as any of their peers but if one of their peers and them appear in front of a magistrate and are found guilty of some offence, one person stays a British citizen and one of them loses their entitlement of British citizenship.”

He said there was a parallel system “which deprives one child of citizenship while the other child has the opportunity as a full citizen to have that security to assist them in their reintegration”.

The Scottish National party MP Stuart McDonald is among the politicians calling for the requirement to be scrapped. He said: “The introduction of the good character requirement for children seeking citizenship was totally ill-conceived. It’s implementation has been utterly inhumane. It is time for the test to be scrapped.

“These children should be able to obtain British citizenship on the strength of their connection with this country and because it is their home, and that should be an end to the matter.”

David Alton, who took part in the proceedings on the 1981 Nationality Act, said: “It was never parliament’s intention that non-migrant children should be denied British citizenship.” He said “officious use” of the good character test was one of several barriers deterring children from registering for citizenship.

“How we respond to a small number of vulnerable children is a pretty good test of our country’s own good character rather than a test of theirs,” Lord Alton said.

The Labour MP David Lammy said the good character requirement targeted children of ethnic minorities and children in care. “At a time when we should be compensating those members of the Windrush generation who were unlawfully detained or deported, the good character requirement for child citizenship applications drags more innocent people into uncertainty and despair,” he said.

Lammy described the policy as the “height of coercion and domination,” adding: “Instead of helping those who are already drowning in a sea of governmental incompetence, the government is sinking to new depths with this barbaric policy.”

Afzal Khan, the shadow immigration minister and MP for Manchester Gorton, said: “It is cruel and absurd that the government is applying a good character requirement to children. Many of these children were born in the UK. The government is using spurious grounds to deport them to countries they have never even set foot in.”

The Home Office said: “The good character requirement applies to all persons aged 10 and over, as that is the age of criminal responsibility.”