The move follows protests from ministers and Tory backbenchers over the disclosure that a 17-year-old boy was arrested for suspected drink- driving less than a week after returning from an 80-day journey through six African countries at cost of pounds 7,000 to the taxpayer.
But despite the ban, which will stay until the social services department presents its report in March, the local authority stoutly defended the use of the Bryn Melyn project, set up by Brendan McNutt, its principal, which operates from a former farmhouse near Bala in north Wales.
The therapy - which involved the boy in a 13,000-mile journey through Egypt, Kenya, Tanzania, Malawi, Zambia and Zimbabwe accompanied by a social worker - has proved more successful at stopping young people reoffending than sending them to secure accommodation.
Virginia Bottomley, the Secretary of State for Health, attempted to deflect criticism by saying that guidelines would shortly be issued to local authorities urging them to ensure that children involved in wrongdoing should not feel rewarded by the actions.
But it appears the guidelines, to be issued primarily by the education department, deal with the behaviour and discipline of problem pupils rather than young offenders.
Michael Howard, the Home Secrtary, said that a section of the Criminal Justice Bill would give courts the power to direct the sentencing of young offenders like the 17-year-old, rather than leaving it to the discretion of local authorities as happens now.
The boy, who cannot be named for legal reasons, was arrested on Monday evening when he failed a breath-test. He is awaiting sentence for a series of offences including ram-raiding, burglary, affray and obstructing police.
He was due for sentence in the week before Christmas but missed the hearing because he was abroad on the trip designed to confront his unacceptable behaviour and reform his character - a situation which those who run the Bryn Melyn project say it is not possible to recreate here.
Anne Peniket, chairman of Gloucestershire's social services committee, said the council had used the centre, at a cost of pounds 1,800 a week, in only a few of the most serious cases where the only alternative would have been secure accommodation at a cost of at least pounds 2,000 a week.
She said secure accommodation had been shown to be far less effective, with about 80 per cent of inmates reoffending, compared with 20 per cent of those who attended Bryn Melyn.
However, Fred Davies, Gloucestershire's deputy director of social services, said that because of concern raised by the latest case, a review of the policy was being conducted and no more juvenile offenders would travel abroad in the meantime.
Mr Howard said that those responsible for the trip, which included a safari in Kenya and a journey to the pyramids, had 'more money than sense'.
Sir Ivan Lawrence, Tory MP for Burton and chairman of the all-party Commons Select Committee on Home Affairs, said: 'It offers reward for wrongdoing and if it does not really work then it really does prove that the whole thing is a waste of time and money.'
Harry Greenway, Tory MP for Ealing North, said: 'The practice . . . is now proved to be a massive and costly failure.' He intends to table questions in the House of Commons.