Poor regulation of private fostering is leaving hundreds of children vulnerable to abuse, an investigation for the BBC's Newsnight programme has found.
The children, many brought into the UK from abroad, are invisible to the authorities, welfare groups warn.
Councils suspect there are 500 cases of abuse of privately fostered children but Children and Families Across Borders says this is an under-estimate.
Ministers say they want to improve regulation in the area.
The findings come 10 years after the murder of eight-year-old Victoria Climbie who was brought to England from the Ivory Coast.
Victoria died in 2000 after being tortured for months by her great-aunt and her partner in north London.
Research shows there are at least 10,000 children in Britain growing up in informal fostering arrangements unknown to local authorities.
In 2008, Ofsted found that more than a quarter of all local authorities in the UK had inadequate arrangements for private fostering.
One leading international child protection agency, Children and Families Across Borders (CFAB), says of the 500 cases of private fostering where councils believe there may be neglect or abuse, about half involve children from abroad.
But Andy Elvin, head of the CFAB network, said: "There are probably several hundred more of these a month going on that we just don't know about."
Newsnight traced the journey of one young Nigerian, Tunde Jaji, now 24, who was brought to London when he was five years old to live with a woman he called his "aunt".
Years later, he discovered they were not related.
Mr Jaji said his "aunt" lied to him by telling him both his parents were dead and describes how she used to hit him, verbally abuse him, and force him to perform chores she did not demand of her own children.
The abuse that Mr Jaji was subjected to was not of the same order as that suffered by Victoria Climbie.
"She used to hit us over silly stuff. If I didn't clean the stairs or the kitchen properly she used to say I was evil, or that's why my mum died," Mr Jaji said.
At the age of 18, Mr Jaji discovered that he had no official papers and no right to remain in Britain. However after he was befriended by a former teacher he managed to win a place at university, and eventually acquired UK citizenship.
His local authority, Haringey in London, apparently never suspected that he was being privately fostered, Newsnight found.
This was despite the fact that the given names of his carers on various documents did not match, and the fact that the family was contacted several times by social services for other reasons.
Lynne Awbery, the former teacher who helped Mr Jaji when he discovered the truth about what had happened to him, said: "If this family were known to social services why didn't they ask questions?
"There just seem to be masses of questions that people could have asked."
The council's most recent dealings with Tunde in 2007 involved successfully helping him get his student loan and permission to stay in this country
Haringey Council spokesperson
Legislation introduced after the death of Victoria Climbie requires local authorities to be pro-active in investigating possible private fostering arrangements.
A Haringey Council spokesman said: "Private fostering arrangements have improved in Haringey and elsewhere since 2005 when regulations were introduced.
"We immediately developed information for professionals and families and set up a dedicated private fostering team in 2006 to ensure such arrangements could be more closely monitored.
"The council's most recent dealings with Tunde in 2007 involved successfully helping him get his student loan and permission to stay in this country."
Last month, the £235m government database Contactpoint, which was established in the wake of the Victoria Climbie case to aid child protection, was switched off after the government argued the system was disproportionate to the problem and would look at developing other solutions.
The Department for Education, which is responsible for child protection, said: "Ministers are exploring alternative ways to help key professionals support and protect our most vulnerable children.
"We are looking at what more can be done to increase considerably the numbers of privately fostered children who are known to local authorities."
While in opposition, current Children's Minister Tim Loughton called for private fostering to be made "a fully regulated activity, with penalties for people who fail such children."
Watch Tim Whewell's films on invisible children on Newsnight on Monday 13 and Tuesday 14 September 2010 at 2230 BST on BBC Two.
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