The children love this and it makes a lot of sense to adults too!
We picked up this idea from the Orison prayer spaces website. Read their version here.
Get a jug of water and some effervescent vitamin tablets (I break these into quarters, so they're not so big). Encourage the children to think of someone they need to forgive. Talk about how when we are hurt and angry it hurts us too, but we can ask God to help us to let go of these feelings. Put the tablet in the water and get the children to imagine asking God to help them forgive. As the bubbles start to come off the tablets, imagine giving the hurt feelings to God.
The tablets take a while to dissolve, which also illustrates that sometimes it takes a long time to forgive. The water might also have changed colour, which illustrates that it's not as if the thing that hurt you had never happened, it's just been changed by God.