It will become harder for adults to search for site users under 18
Sex offenders' e-mail addresses are to be passed to social networking sites like Facebook and Bebo to prevent them contacting children.
Under government proposals, offenders who do not give police their address - or give a false one - would face up to five years in jail.
Websites would be expected to monitor the e-mail address usage or block them accessing the sites.
The Home Office said the new laws would apply to about 30,000 sex offenders.
Home Secretary Jacqui Smith said she wanted children to be "free from fear".
"We need to patrol the internet to keep predators away from children in the same way as we patrol the real world," she told GMTV.
Children's charities have welcomed the measures, but others say the internet cannot be policed.
The exact details of the monitoring system will be worked out by the government's Child Exploitation and Online Protection (Ceop) centre and internet firms.
Ceop already tries to police the internet, investigating 400 reports every month from children experiencing some form of abuse online.
HOME OFFICE RECOMMENDATIONS
Display links to organisations such as Ceop, NSPCC, Samaritans and others so abuse can be reported or users can quickly get help
Arrange for net firms and police forces to share reports of potentially illegal and suspicious behaviour
Make it more difficult for people registered as being over 18 to search for and contact users who are under 18
Work to ensure children do not share too much personal information
The Home Office said it had been in talks with internet firms including MySpace, Bebo, Facebook, Piczo and Yahoo.
The home secretary told BBC News: "I have been very encouraged by the willingness of industry to actually work with us.
"They want children and young people to be safe when they're using their sites. They want to make sure people get the benefits whilst we minimise the risks."
She said she accepted such a scheme could never be "completely foolproof" but did not see that as a reason not to try.
The move comes after a survey by telecoms regulator Ofcom found nearly half of children aged from eight to 17 had a profile on a social-networking site.
And a third of those aged nine to 19 who used the internet weekly had received sexual comments via e-mail, instant message, chat or text message, the survey indicated.
A Facebook spokesman said it used technology and social factors to promote a safe and trusted environment for users.
Responsibility for online behaviour was established through a real-name culture instead of a screen-name culture, he said.
Users were provided with easy reporting links for offensive material and extensive privacy controls and there were aggressive service levels set for dealing with reports of inappropriate behaviour.
Technology was deployed to detect inappropriate use of the site directed at children, he added.
Annie Mullins, chairman of the Home Office task force on child protection and the internet, said it would not be easy to bar registered child sex offenders from social networking sites.
She said it was important to consider the security issues of any list and how that list was transferred and managed by a third party.
"The most important thing is that parents engage with their children, use the software that is available and keep an ongoing dialogue."
Plans to force sex offenders to register their e-mail addresses and chatroom names were first announced last year by the then home secretary, John Reid.
Some of the main concerns with the measures are how to prevent sex offenders from having multiple e-mail addresses that may not be registered.
The Home Office said offenders who use any e-mail address that has not been given to the police, face up to five years in prison.
Further concerns surround working with websites based abroad over which the UK has no jurisdiction. Both Facebook and MySpace are based in California.
Children's charities the NCH and the NSPCC welcomed the new measures.
Shaun Kelly, of NCH, said they would add protection for children using the internet.
"It will mean that those who have previously offended against children will be stopped from accessing certain websites and certain social networking sites that children and young people are known to use."
Diana Sutton, head of policy at the NSPCC, said: ┐Many sex offenders will go to extraordinary lengths to access children, and we need to ensure that safety measures in cyber space are as stringent as they are in the wider world."
But Donald Findlater, from the Lucy Faithfull Foundation, which works with survivors and perpetrators of child sex abuse, warned that banning sex offenders could be counterproductive.
"Sex offenders need to be encouraged to live good lives too, and by stopping them using a technology that actually means they can't communicate with other adults... may rebound badly on those individuals."
The government guidance contains recommendations for service providers and safety advice for first-time users.
It also includes:
- Arrangements for the industry and law enforcement agencies to share reports of potentially illegal activity and suspicious behaviour
- Making it more difficult for people registered over the age of 18 to search for users under the age of 18
- Encouraging children not to provide excessive information about themselves
- Social-networking sites including links to organisations such as Ceop, the NSPCC and the Samaritans so users can get help or report potential problems easily
Other government measures include a "kitemark" for filtering software.
Chief Executive of Ceop Jim Gamble said the guidance had the "real potential to accelerate online child protection".
"It will provide parents with those crucial indicators as to which sites and providers they should be using, allowing children the chance to get on and enjoy the full benefits of the internet with vital reassurance."