Aimed at curbing youth crime in regional areas, the NSW bail changes have been fiercely opposed by youth advocates and legal groups since being introduced in April.
Labor revealed on Friday it wanted to extend the tougher regime until 2028, citing the higher rates of courts refusing bail for youths who were repeatedly charged.
Between April and September, 97 of 123 alleged young offenders were refused bail using the new law.
But locking up kids had never worked anywhere, the state's Aboriginal Legal Service said.
"These bail laws have not only failed to reduce crime, but have put another generation of young children into an express training program for a life of crime and suffering," chief executive Karly Warner told AAP on Friday.
Increasing the rate of bail refusal was a poor measure of success and said nothing about crime reduction, Greens MP Sue Higginson said.
"The changes were not designed to reduce crime, they were only designed to make the government appear tough on crime," she said.
"Twelve months later, we are in exactly the situation that the premier was warned about: more young First Nations people in prison and no clear reduction in the rate of offending."
The NSW Bar Association and Law Society of NSW also opposed the changes in 2024, fearing they would jail more vulnerable children.
The three-year extension will require fresh legislation, reigniting rifts in government ranks and the progressive crossbench over the impact on youth.
But the government says the extension will allow it to review longer-term crime data.Â
The crime statistics bureau typically analyses data based on two- or five-year trends.
NSW Premier Chris Minns cited data that the rate of bail being denied for applicable cases was more than double that of cases for young people charged with similar offences generally.
He argued that longer stints in custody could give youths more time to engage in rehabilitation programs that kept them out of jail in the long-term.
"We don't want to see kids incarcerated, but we also can't have patterns of repeat criminal behaviour," the premier said.
Mr Minns admitted it would be a real challenge meeting targets to reduce Indigenous incarceration rates as more children were denied bail, but the government was working with local organisations to provide "hope and opportunity".
The premier travelled to one of the regional towns hardest hit by youth crime, Moree, to announce the changes and meet affected business owners.
A $2 million boost for youth engagement, with a focus on reducing crime, improving family safety and supporting early childhood development, has also been unveiled.
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