Up to 1,000 youngsters living in London are at risk of being sexually exploited, according to a new report.
The report says some boroughs are under-identifying victims
In addition to organised prostitution and trafficking, Barnardo's researchers uncovered children abused by relatives and sex being exchanged for favours.
But its report says protection services have only identified 500 likely child victims of the exploitation and claims this is underestimating the problem.
It also criticised the use of secure accommodation to protect children.
The report, Meeting the needs of sexually exploited young people in London, was written by Dr Sara Scott and Zoe Harper and was launched on Friday.
It said some London boroughs could be failing to identify young people at risk by up to 80%.
Barnado's assistant director of children's services, Libby Fry, said: "These young people are the most vulnerable in the capital and they desperately need to be identified, so that they can be offered safe accommodation and support to re-build their lives.
"We need to work across the police, social services and voluntary agency services and be fully resourced to tackle this hidden problem."
The report also found that young victims can feel punished by being placed in secure accommodation because it fails to support their needs.
"The findings show there is still a huge need for further resources in London to ensure local authorities have specialist services to which they can refer young people, as well as further guidance from the government on the use of secure accommodation," said Dr Scott.
The study was funded by the independent grant-maker, the Bridge House Trust.
Clare Thomas, chief grants officer at the trust, said an extra £295,000 had been earmarked for Barnardo's to work with sexually exploited children and young people in London.
"And we're calling on other funders to re-investigate what they can do to make a real difference," she said.