The current age of criminal responsibility is eight
The Scottish Law Commission says that the system of children's hearings should be able to deal with all children who commit offences - even if they are too young to be taken through the courts.
Scotland has one of the lowest ages of consent in the world where children as young as eight can appear in court under the current rules.
In England, the age of criminal responsibility is 10, while in Ireland it is seven and in Belgium, 18.
But the Association of Scottish Police Superintendents (ASPS) says it is "extremely concerned" that the commission's proposals for change could lead to a rise in crime.
"It is our view that children are maturing much earlier and there is no doubt there has been a rise in the number of offences being carried out by youngsters aged nine or 10," said ASPS general secretary Jack Urquhart.
"We have seen no evidence to suggest that these youngsters should be exempted from the criminal justice system.
"After all, is it not better to get them on the straight and narrow at an earlier age than let them develop bad habits which cause misery to thousands of people every year in Scotland?"
The Scottish Law Commission is an independent body established to keep the law under review and recommend reform when required.
Consultation 'divided'
It was asked by the Scottish Executive to examine the rules on the age of criminal responsibility, which denotes the age below which a child is considered mentally unable to commit crime.
The commission recommends a ban on prosecuting children under the age of 12.
"Although opinion on consultation was divided, the majority of those responding favoured a bar," said the report.
"A bar at this age would be consistent with the requirements of the European Convention of Human Rights.
The report said that only half of one per cent of offenders aged under 16 were dealt with through the criminal courts.
The vast majority are handled though the children's hearings system, which the report says, should be able to deal with all child offenders.
However, the commission rejected the argument that no child below the age of 16, and above the age of 12, should ever be prosecuted.
Justice system review
"We believe that there will continue to be cases, admittedly exceptional, where the prosecution of children under 16 is in the public interest," said the report.
Susan Matheson, from the charity Safeguarding Comunities, Reducing Offending in Scotland (Sacro), suggested the proposals did not go far enough.
"Although the law commission points out that it satisfies the European Convention of Human Rights, it doesn't meet the standards of the UN Convention on the Rights of the Child, which says we are children until we are 18."
Last year the commission published proposals to abolish the age of criminal responsibility.
A commission spokesman added: "Most of our consultees agreed with our view that the age of criminal responsibility is better thought of as concerning limits on prosecuting children rather than the capacity of children to commit crimes."
The Scottish Executive will now consider the recommendations in the context of its wider review of the Scottish youth justice system.
Mr Urquhart said that the ASPS, which was not consulted, would consider writing to First Minister Jack McConnell to voice its concerns at some of the recommendations.