My way of dealing with this - but I'm in a 1-on-1 tutoring situation- is to pretend not to understand the "native" language.
However, I do realise that this method may not be practical in a classroom where student may be even more selfconscious.
How many students do you have?
Would it be feasable to take them aside one by one at the end of the day ( one a day ) and have a little informal chat ( IN ENGLISH!), so they can make mistakes and not be laughed at by their classmates?