Campaigners have called for a specialist police officer to be drafted into every London borough to combat child sex abuse in the city.
Campaigners say child exploitation is not a government priority
The children's charity Barnardo's also said frontline staff needed training to help more than 1,000 children at risk of sexual exploitation.
Abuse ranged from relationships where youngsters received accommodation in return for sex to formal prostitution.
The report also said abused children had no access to specialist services.
They also warned vulnerable young people were ending up criminalised because they were too scared to name their abusers.
"Sexual exploitation of children and young people is much more prevalent in London than most of its citizens appreciate," said Barnardo's chief executive Martin Narey.
"Some of the capital's most vulnerable children suffer at the hands of adults who, all too often, suffer no consequences following their abusive behaviour."
Between 2003 and the end of 2005, there were 425 recorded offences of sexual grooming across England and Wales but no prosecutions, and only 35 of "abusing children by prostitution".