The group also wants sex education to be made a compulsory part of the national curriculum.
In its first annual report, the group also recommends access to abortions on the National Health Service should be improved for young women who opt for termination.
And it calls for a review of sexual offences laws so that professionals offering contraceptive or sexual health services to youngsters are not undermined or criminalised.
Halving conceptions
The advisory group, set up to advise the government on teenage pregnancy, says its recommendations are necessary if the conception rate among under-18s is to be halved by 2010.
Official statistics show the teenage pregnancy rate is falling - in 1998 there were 8.8 conceptions per 1,000 girls under 16 in England, falling to 8.2 per 1,000 in 1999.
But the UK still has one of the highest rates in Europe, hence the government's aim to half the under-18 conception rate.
Vice-chair of the advisory group Gill Frances denied the group was advocating condom machines in school toilets.
"What we're saying is that a school should work with the people in their community to provide confidential help, advice and support for young people in or nearby their school.
"It should be with a health professional who's trained and qualified to work with young people in a confidential setting," Ms Frances said.
Access to abortion
Access to abortion was very patchy, depending on where a youngster lived, she said.
"This is a terribly difficult decision for a young person to make and therefore not only must they have adequate support to make those sort of decisions, they must have easy access to enable them to carry out that decision if that's what they and their families want."
Chair of the advisory group Lady Winifred Tumim said previous efforts to reduce teenage pregnancy rates had been hampered by low expectations, ignorance and mixed messages.
"These are deep-rooted problems which do not just affect our teenage pregnancy rates: They affect young people's overall life chances," she said.
"We must also learn from neighbouring countries in Europe, which have a much more pragmatic outlook on teaching young people about sex and contraception, and where teenage pregnancy rates are significantly lower than in England."
The advisory group, which is made up of teachers, nurses, GPs, youth workers, social workers and health promotion specialists, presented its report to the government on Friday.