More than a quarter of eight to 11-year-olds who are online in the UK have a profile on a social network, research shows.
Most sites, such as Bebo, MySpace and Facebook, set a minimum age of between 13 and 14 to create a profile but none actively enforce the age limit.
Ofcom's survey of 5,000 adults and 3,000 children found 49% of those aged between eight and 17 have a profile.
Ofcom says parents need to keep an eye on what their children do online.
Wide usage
The Ofcom report looks into the impact of social networks on people's lives in the UK as part of a wider media literacy campaign and surveyed 5,000 adults and more than 3,000 children.
Its statistics suggest that around 19% of all UK youngsters have a presence on a social networking site.
"Social networks are clearly a very important part of people's lives and are having an impact on how people live their lives," said James Thickett, director of market research at Ofcom.
SOCIAL NETWORKING SURVEY
He added: "Children's lives are very different from what they were 20 years ago. Social networks are a way of creating a social bond."
The Home Office has been working with social networking firms and is expected to publish a set of guidelines for the sites around best practice, security and privacy on Friday.
The report is expected to recommend that profiles created by children are set to private by default, or are only viewable by friends nominated by the user.
It also suggests that social sites maintain a distinct contact page listing contact numbers, such as 999, children can use to get help.
The three leading social networks, MySpace, Bebo and Facebook, all say they remove profiles of users that are found to be too young on their sites.
But at present no technology is used to actively verify the age of users.
The Home Office guidelines are set to encourage social networking sites to investigate age verification technologies and to give better signposting to users about privacy settings, and warnings about the implications of posting personal details.
HAVE YOUR SAY
A spokesman for MySpace said the firm "proactively ensures that profiles of 14 and 15-year-olds are automatically made private so that users are protected from adults they don't already know in the offline world".
The company said in the future all of its users under 18 would have profiles set automatically to private.
Risk perception
More than a fifth of people in the UK aged 16 and over have an online profile, the Ofcom survey showed.
But the report revealed a "significant difference" between the perception of the risks and use of social networks between parents and children.
"While people are aware of the status of their profile there is a general lack of awareness of the issues attached to them around privacy and safety," said Mr Thickett.
FROM THE DOT.LIFE BLOG
He added: "People put aside concerns about privacy and safety believing they have been taken care of by someone else."
Forty-one per cent of children had set their profile so that it was visible to anyone, according to the report.
But 16% of parents admitted they did not know if their child's profile could be seen or not by strangers.
"There is an issue about parenting," said Robin Blake, head of media literacy at Ofcom.
New friends
He added: "Parents who are allowing their children to go online without supervision and support... need to recognise that their children are potentially at risk."
According to the Ofcom report, almost 60% of children use social networking sites to make new friends, compared to 17% of adults who use the sites for the same purpose.
READ THE REPORT
While two-thirds of parents said they set rules for their children when using social networking sites, only 53% of children said that their parents had set such rules.
"Children are using these sites with a far lower awareness of some of the issues and rules that these sites entail," said Mr Thickett.
Ofcom called on social networks to improve the visibility of privacy settings.
Monitor guidelines
"The settings are not obvious to some people when using these sites," said Mr Blake.
He said Ofcom would be "monitoring and reviewing" the guidelines that social networks had drawn up in conjunction with the Home Office.
ADVICE FOR PARENTS
However, Ofcom admitted it had no legal authority over social networks and was not "regulating them".
Mr Blake said: "Ofcom's approach is very much to encourage industry to do the right thing."
Dr Rachel O'Connell, chief safety officer at Bebo, told BBC News: "We're working with the regulatory bodies. It's critical to our business that we adhere to these guidelines."
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