More than a quarter of eight to 11 year-olds with internet access claim to have a profile on a social networking website, despite the existence of pre-teen restrictions, according to research from Ofcom.
The UK's three most popular social networks - Bebo, Facebook and MySpace - claim to have a minimum age limit of 13 or 14, but preteens are bypassing them in their thousands.
The study found that almost half of eight to 17 year-olds with internet access now have profiles on social networks, but 41 per cent admitted to not using any privacy settings.
However, only 30 per cent of parents are aware that their children's profiles are open to view by online strangers.
Ofcom said that parents are unaware of the dangers their children face by posting details on social networking sites, and should do more to monitor their use.
"There are huge benefits to internet use, and we do not want to be too scared about the dangers," said Robin Blake, head of media literacy at Ofcom.
"But parents who allow children to go online without supervision need to recognise that they are potentially at risk.
"When children go out to play, parents often state ground rules about when they come back. Parents need to recognise that going online has the same kind of risks."
These latest fears follow growing concerns about the role that social networks in encouraging recent suicides in Bridgend, South Wales.
Addressing the issue of the online safety of children, the Home Office will announce on Friday a new voluntary code of conduct for leading social networks.
As part of the code, Bebo, MySpace and Facebook will all agree to ensure a high privacy setting as a default when teenagers set up profiles.
Social networking sites will also agree to advertise the 999 emergency number on their pages to help children fend off online approaches from paedophiles.
"An increasing number of people and businesses have embraced online networking, but not all are fully aware of the possible danger and the potential for identity theft," said Mark Evans, marketing and communications director at IT security specialist Imerja.
"While the danger to children is a very serious one, the government should not stop at encouraging these networks to be more responsible in all levels of security."
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