Drawings and computer-generated images of child sex abuse would be made illegal under proposals announced by Justice Minister Maria Eagle.
Owners of such images would face up to three years in prison under the plans.
The Obscene Publications Act makes it illegal to sell or distribute photos of child abuse but it is legal to own drawings and computer-generated images.
Ms Eagle said the proposed move would "help close a loophole that we believe paedophiles are using".
The plans are part of the government's response to a public consultation exercise carried out last year.
"If we do not address the issues these images raise now it is likely their availability will continue to grow"
The government has acknowledged that paedophiles may be circumventing the law by using computer technology to manipulate real photographs or videos of abuse into drawings or cartoons.
A Ministry of Justice spokeswoman said the authorities had "noticed an increase in the existing availability of these images on the internet".
She said: "If we do not address the issues these images raise now it is likely their availability will continue to grow.
"They are often advertised as a legitimate depiction of child sexual abuse."
'Unacceptable' images
The spokeswoman said police and child welfare groups had expressed concern at the "growing increase in availability of these depictions of child sexual abuse".
Ms Eagle said the plans were "not about criminalising art or pornographic cartoons more generally, but about targeting obscene, and often very realistic, images of child sexual abuse which have no place in our society".
Shaun Kelly, safeguarding manager for children's charity NCH, said the proposals were a step in the right direction.
He said: "This is a welcome announcement which makes a clear statement that drawings or computer-generated images of child abuse are as unacceptable as a photograph.
"It adds to the range of measures to help ensure the safeguarding of children and young people."
The Child Exploitation and Online Protection Centre (Ceop) works to track down paedophiles and identify children via online images. It welcomed the move.
"We are positive that there is a need to clarify this position in law and believe that people actively seeking out, creating or sharing images of young children being abused represent a potentially significant risk. We are therefore committed to further engage with the Ministry Of Justice to ensure the most effective measures possible are implemented," said Ceop chief executive Jim Gamble.
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