YouTube said it believed it was a safe environment for children
YouTube has been criticised by MPs, who say it must do more to vet its content.
In a review of net safety, the Culture, Media and Sport select committee said a new industry body should be set up to protect children from harmful content.
It also said it should be "standard practice" for sites hosting user-generated content to review material proactively.
YouTube's owners said the site had strict rules and a system that allowed users to report inappropriate content.
The committee also wants a rethink on how best to classify video games - but there is disagreement over who should run the new ratings system.
MPs say the same body which gives age ratings to films - the British Board of Film Classification - should be in charge, but the games industry supports its own voluntary code.
In its report, the committee said that some websites it had monitored as part of its review had a "lax" approach to removing illegal content.
It said it was "shocked" that the industry standard for removing child abuse images was 24 hours.
Google, the firm which owns YouTube, said it was confident the video-sharing site was safe for children.
"We have strict rules on what's allowed, and a system that enables anyone who sees inappropriate content to report it to our 24/7 review team and have it dealt with promptly," said a spokesman.
A direct link from every YouTube page makes the process easy, he added.
"Given the volume of content uploaded on our site, we think this is by far the most effective way to make sure that the tiny minority of videos that break the rules come down quickly," he said.
The committee acknowledged that the volume of content on sites such as YouTube - which has 10 hours of videos uploaded every minute - made it unrealistic to watch every video before it went online.
But, it said that the practice of removing clips only after they are flagged up by users was not working either.
Self regulation had resulted in an "unsatisfactory piecemeal approach which lacks consistency and transparency," the committee concluded.
While it recommended the creation of an industry body responsible for policing the web, it stopped short of making regulation mandatory.
The body - likely to be known as the child internet safety council - will be set up later this year.
"The internet has transformed our lives and is overwhelmingly a force for good. However there is a dark side and many parents are rightly anxious," said committee chairman John Whittingdale.
A clip of a gang rape on YouTube was used as one example of the "dark side" of the net.
Other sites which promote extreme diets, self-harm and suicide were also cited.
YOUR COMMENTS ON CALLS TO VET ONLINE CONTENT
I totally agree with video sites being more aware of what they put on their sites. I was looking at YouTube a few months back and was disgusted to find a video showing 2 men cruelly treating an elephant by sticking hooks into it's back. This made me feel sick and very angry because YouTube always say they monitor content but they clearly do not.
Sarah, Birmingham, UK
Yet again the Government is sticking its nose in where it doesn't belong. What kids see on the net is an issue for their parents. When my son is old enough he will get free reign on the net as I did when I was young. Between now and then I shall be trying to teach him how to be safe, what not to do and why he should avoid certain places. That's my job as I'm his parent.
David Combe, Edinburgh
Any content that I have seen on YouTube that I find offensive or inappropriate I immediately flag up. This is the beauty of the internet which I don't think MP's fully appreciate. The internet polices itself by and large; monitoring legitimate websites like YouTube is simply a waste of money. I'm afraid this is an example of MPs who are behind the times and don't really understand the relevance of new technology.
Thomas Sherborne, Cricklade
My son loves YouTube but I was shocked to discover that they have no language censorship. I found him watching a SpongeBob SquarePants cartoon which someone had overdubbed with virtually every possible swear word and given pornographic overtures. I am by no means a prude but I feel items with such content should at least carry a warning or have restricted access
Steve, Norwich, Norfolk
How about the parents have a go at vetting what their children see?
This approach is completely wrong. More legislation only creates more unenforceable laws, a greater drain on tax-payers' money and a headache for everyone involved (particularly the companies providing the service). Parents should be educating their children about what's acceptable and what's not, maybe even teaching them to flag unacceptable content when they find it. As long as young people want to get some kind of content legislation isn't going to stop them. If they know to stay away from it that's what's going to make the difference.
Erik T, London
Why does the net have to be censored just because some parents can't be bothered to control what their kids watch?
Mike Williams, Truro Cornwall
YouTube is constantly full of very undesirable and shocking material and should adhere to the same standards as other media. If the BBC or any other organisation was allowed to actively expose people to the same sort of stuff they would be closed down immediately. The current system for screening or removing undesirable content simply does not work and should be reformed or YouTube punished if it does not clean up it's act. That's what would happen to other media organisations.
Peter Webb, Hampshire