Use this after initial introduction to indirect reported speech & reporting verbs.

Divide learners into groups of 3s. Each group is given a different, short, dialogue (4 to 6 lines is fine). Student A & B from the group read and then act out the dialogue to a student C FROM A DIFFERENT GROUP.

The dialogue should contain sentences that lend themselves easily to reporting verbs. e.g. "You stole my money, didn't you?" = accused; "No, I didn't!" = denied. etc.

A and B act out the dialogue to Student C FROM ANOTHER GROUP, while their own Student C is observing a different group's dialogue.

The student C from each group observes the other group's dialogue for a couple of mins, then returns and uses indirect reported speech, plus a reporting verb, to tell student A and B what was said. Student A and B can write this down, as student C may need to go back and forth a few times until they're confident of reporting it correctly.

When finished, Student A and B try to change the reported speech back into a direct speech dialogue. Then act it out in front of the class, followed by the original version.

Students vote on how close each group came to getting it correct, or at least including the main info and the ‘tone’ of the conversation.

Teacher identifies good examples and a few errors that students made, then elicits how to correct/avoid these in future.
If time permits, change teams around so someone else is student C and the teacher distributes new dialogues.

N.B.

Works well in large classrooms or when you have a room per team. If space is limited, try playing some music during the activity to stop A and B hearing the original dialogue directly.

Run time. Can be a long 50 mins, if done thoroughly. Two line dialogues work if time is short, though.