A panel of 12 experts was involved in producing the report, which is due for publication on Thursday morning.
While the Stewart Report has found no clear evidence that mobiles can damage the health of either adults or children, scientists suggest there may be some effect on the human body.
And it recommends that mobile phone companies should not aim their advertising at children.
The report was commissioned in response to fears that mobile use could be linked to memory loss, and even Alzheimer's disease.
Some studies have suggested that children are more vulnerable to the effects of microwave radiation emissions because their nervous systems are not fully developed and their skull is thinner than adults, providing less protection.
A panel of 12 experts was involved in producing the report, which is due for publication on Thursday morning.
The report is believed to point out that use of mobiles whilst driving represented a far greater hazard to the public.
Sir Liam Donaldson will be asked to work with panel chairman Sir William Stewart from Tayside University in Scotland to draw up new precautionary health guidelines on mobiles.
This could involve advice on how how often and how long young people could use a mobile - and even recommend a minimum age.
Other recommendations will include restrictions on the siting of mobile phone transmitter masts near schools, hospitals or residential areas.
However, this is belived to be on planning rather than health grounds - no strong evidence of any health problems related to the masts has been uncovered.
There has been a fierce campaign, particularly in Scotland, to get the masts moved away from such areas.
£24bn windfall
There are an estimated 24m mobile users in the UK, including 4m schoolchildren.
The Treasury has just generated a windfall of £22.5bn from the auction of third-generation mobile phone licences.
Earlier leaks to the press had suggested that mobiles would be given a "clean bill of health" by the report - but panel members are understood to have been "angered" by this suggestion.
Dr Alan Preece, from Bristol University, told the BBC that more research was needed: "I just can't believe the explosion in mobile phone use in the last five years.
"I think we really do need to research it to reassure the public that there are no long term effects."
Mary MacLeod, from the National Family and Parenting Institute said: "Parents need to have accurate information about health risks so that they can make judgements about their children using mobile phones.
"A growing number of children have access to mobile phones, and they are a great source of comfort and security for parents, knowing they can find out where there children are and can keep in touch with them."
The radiation emitted by mobile phones is not x-ray radiation, but microwave radiation, and some scientists were concerned that it might actually be heating and damaging brain cells because the phone is held so close to the head.
Others have dismissed this, saying even a bout of exercise would heat the brain more than mobile phone microwaves.
The Consumers' Association published research in April which showed hands-free kits - which had been promoted as a way of reducing microwave interference on the brain - could actually amplify the energy and channel it directly into the caller's head.
However, this research was criticised by some scientists.