In the design and use of large composite panels in structures such as aircraft and space vehicles a major concern is the ability of the panel to function after being damaged. One technique that has evolved from the stringer reinforced metallic panel is the buffer strip or hybrid panel. The present study considers a method of analysis capable of predicting accurately the stress concentration at a rectangular cutout in a unidirectional composite laminate containing symmetrically placed buffer strips. The analysis is based on a materials modelling approach by using the classical shear lag assumption to describe the stress transfer between fibers. Explicit fiber and matrix properties of the main panel and the buffer strips are retained and changes in the stress concentration as a function of the relative material properties and buffer strip width are presented. A substantial reduction in stress concentration is achieved by using soft buffer strips.