The number of children being held at a controversial centre used to detain failed asylum seekers before deportaion rose by about a third last year.
The number of children held at Dungavel has increased.
The chief inspector of prisons said Dungavel, in Lanarkshire, housed 122 children in the first 11 months of 2006, compared to 94 the previous year.
However, Anne Owers said in her report that Dungavel was the "best-run" removal centre in the UK.
The government said reforms were addressing some of the concerns.
The prisons watchdog has produced a string of reports over the past two years on immigration removal centres used to hold failed asylum seekers who have been told they are to be deported.
The centres are controversial because people are held in prison-like conditions.
Two of the centres, Harmondsworth, near Heathrow, and Yarl's Wood, in Bedfordshire, have experienced major disturbances.
One of the key issues for campaigners has been the detention of families. Ms Owers has criticised the holding of children, saying it should be used only as a last resort.
But in the latest inspection of Dungavel, Ms Owers said managers had "gone a long way" to create a decent environment for "extremely vulnerable people".
However, she also reported the number of children held at Dungavel had increased.
The time they were held on average had also gone up, from three to three-and-a-half days. Seven children had been held for more than a week, including two for 32 days.
'Poorly equipped cells'
Ms Owers said the proportion of Dungavel detainees complaining of feeling "unsafe" was half that of all other removal centres.
"Staff took pride in their work and their efforts to support often anxious and vulnerable detainees," said Ms Owers.
"This was perhaps most clearly evidenced at the time of the inspection when the centre, for the second time, received detainees displaced from Harmondsworth [removal centre] after serious disturbances there."
The watchdog went on to criticise wider enforcement procedures within the immigration service, including the holding of detainees for long periods in escort vans. One man had been moved seven times in six weeks.
Failed asylum seekers, including one woman who was five months pregnant, were being transferred from Northern Ireland were also being kept in poorly equipped police cells, Ms Owers said.
Home Office Minister Liam Byrne welcomed the report, saying reforms to the asylum system to improve case management were addressing some of the concerns.
"The report illustrates numerous examples of good and innovative practice in regards to welfare, induction, religious affairs and education and also applauds staff," said Mr Byrne.
"The Border and Immigration Agency recognises and acknowledges the need to keep detainee transfers to a minimum, however it is sometimes necessary to transfer detainees for operational reasons."
But critics said the report showed that the Home Office had made the asylum process less humane.
Liberal Democrat Scottish spokeswoman Jo Swinson MP said: "Arresting children in dawn raids and then dumping them in a former prison for months on end is no way for a civilised government to behave."
Robina Qureshi, director of asylum campaign group Positive Action in Housing, said: "There are no moral grounds for families to be detained there or for Dungavel to even exist on Scottish soil."