Australian National University research officer Mary Ivec said vulnerable children could be safer and happier if the ACT government applied restorative justice principles to its child protection system in the same way that it had pioneered the method in its treatment of criminals and victims of crime.

The Productivity Commission's latest Report on Government Services found that more than 550 children were in out-of-home care in Canberra on June 30, and at least 140 were indigenous.

Ms Ivec said research she conducted with indigenous ACT, NSW and Queensland families who had been in contact with child protection services found they felt they had low levels of trust in the system and also that they were not respected by authorities.

She said child protection should be made less adversarial and should better recognise the emotional importance of children maintaining contact with their families, even if it was unsuitable for them to be living together.

''Canberra's done some innovative work around restorative justice, some of the programs we've looked at in our own ANU studies show there are ways of doing this differently, so there needs to be a collective will to say we can do it differently,'' she said.

Jennifer Llewellyn, professor of law at Dalhousie University in Halifax, Canada, is an expert in restorative justice and child welfare. She said traditionally child protection systems blamed individual parents and carers rather than looking at broader social problems that might be contributing to the mistreatment of children.

''Australia and particularly the ACT is well placed to ask what do we think childcare and protection should be about,'' she said. ''When we understand that, and when we understand why it's not doing it, then [we can] make suggestions of how we could do things differently.''

A spokesman for the Community Services directorate said the government would finalise its new out-of-home care strategy during the second half of this year.

He said the new focus would be more on engaging with children at an earlier stage so there would be no need to take them from their families.

''It will also have an increased focus on reunification,'' he said.

He said the Report on Government Services showed that, of all Australian states and territories, the ACT had the second-highest proportion of children and young people in out-of-home care placed with relatives.