Some children are 'groomed' to run away from council care
Britain is the destination for what amounts to a modern-day "slave trade", the Home Affairs committee has warned.
The cross-party group of MPs, which is tasked with scrutinising the Home Office, said there are at least 5,000 human trafficking victims in Britain.
The committee said most are women and children who are forced to work in the sex trade or as beggars.
MPs criticise a lack of safe-house places and "major gaps" in awareness at the UK Border Agency.
The committee also warned that some 60% of trafficked children held in council homes go missing and are never found.
The report states that some homes are used by traffickers as "holding pens" for their victims until they are ready to pick them up.
Committee chairman Keith Vaz said there was a lack of understanding of the situation among authorities.
He said: "This is not immigration crime and cannot be dealt with as such. What we are seeing is in effect a resurgence of a type of slave trade.
"Yet we have no good information on the scale of the problem, enforcement is patchy, prosecution rates are low and there is little protection for victims."
Mr Vaz's comments come a week after Prime Minister Gordon Brown vowed to investigate reports that trafficking gangs have targeted a children's home next to Heathrow airport.
According to the Guardian newspaper, a report from the UK Border Agency showed more than 80 Chinese children have gone missing from the home since 2006.
The report, which was marked "restricted", said the centre had become a "clearing house" for international gangs.
It says Chinese children who arrive alone at the airport are taken into local authority care, and in two thirds of cases vanish within a week.