A prison psychologist has told a parole hearing that David Norris, convicted of murdering Stephen Lawrence, is not yet safe to be released on licence. Norris, 49, was jailed in 2012 and is seeking either release or a move to a less secure setting. The expert witness said a transfer to a lower-security, closed prison would be appropriate so Norris's behaviour could be further assessed.

During the hearing this week, Norris publicly acknowledged for the first time that he took part in the racist attack on Stephen Lawrence in 1993. He described punching Stephen but denied stabbing him. Norris has refused to identify others involved, saying naming them would put him and his family at risk.

Norris and Gary Dobson remain the only two men who have been convicted in connection with Stephen's murder; four other suspects were never found guilty.

The psychologist said the details of Norris's confession were inconsistent at times, including varying descriptions of how many punches were thrown and whether a kick took place. Asked whether those inconsistencies were due to memory problems or a deliberate rewriting of events, the expert replied: "I don't know the answer to that, but I would say probably a combination of these."

The witness added that Norris was an "unreliable narrator of his own life" and that "He's careful about what he wants to admit to."

The clinician who interviewed Norris for nine hours concluded that he did not meet the threshold for release or relocation to an open prison. Instead, the recommendation was that Norris be moved to a lower-security closed prison so staff could observe and test his behaviour in a less restrictive environment.

The psychologist said he believed Norris had shown genuine remorse, though some of that remorse had been expressed "nowhere near a parole hearing". He also warned that people can feel regret yet still "lapse" in certain circumstances.

Intelligence records from several prisons, the hearing heard, contain allegations that Norris used racially abusive language and was involved in confrontations with Muslim prisoners. There were claims he had thrown excrement and used derogatory terms; Norris has denied those allegations.

On that subject the psychologist said: "I find it unlikely that, across prisons, staff are making things up." He added the evidence suggested Norris shows a lack of racial awareness and is more likely to use racist language when experiencing mental ill health or frustration.

The parole proceedings are being held at an unnamed prison, with a video feed provided to the Royal Courts of Justice in London so the press, the public and members of Stephen Lawrence's family could observe. Stephen's mother, Baroness Doreen Lawrence, watched parts of the hearing via the stream.

Norris appeared with his back to the screen and used a hearing loop at times. He has been in his current prison for about two years and works in the servery, preparing and distributing food. A prison key worker told the panel Norris had come forward wanting to work on "reactions and perceptions of rudeness towards him".

The parole board is expected to reach a decision later this month on whether Norris should be released on licence, moved to an open prison, or remain in a closed facility.