The sexual abuse of children by other children is going to be the next scandal in society, warns Javed Khan, the chief of Barnardo's children's charity. He says that children are becoming desensitised to harmful sexual acts due to watching online pornography.

"There are children who are sexually harming other children, but genuinely don't seem to realise that they have done something wrong, even when they have broken the law and could end up with a criminal record," he said, speaking ahead of tomorrow's publication of a parliamentary inquiry report on children who display harmful sexual behaviour.

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"This is a wake-up call. Society will rue the day if we don't get to grips with the rise of harmful sexual behaviour. It is getting worse by the day because of technology, lack of awareness, lack of parenting skills," he added.

The report, entitled Now I Know It Was Wrong, finds that developing harmful sexual behaviour peaks at the onset of puberty. The inquiry warns that parents and authorities have failed to set boundaries for children who may develop their understanding of sex by viewing hardcore pornography before starting real relationships.

A third and two-thirds of all abuse experienced by children is perpetrated by someone under the age of 18, outlines the report. Most recent police figures show that 4,209 children under 18 were recorded as sex offenders against other children in England and Wales.

Barnardo's Cymru recently began to refer children five years and under, and a third of referrals in Wales involve youngsters under 11 years of age.

Conservative MP for Wealden Nusrat Ghani, who is also chair of the inquiry, said some of the young abusers "came from what looked like healthy middle-class homes" and were not only those who had been abused or were vulnerable.

She said parents tended to think "bad things will only happen to [their children] outside the home" and they "are safe because they are not running around with a gang." In fact, she said, they could be at greater risk from dangerous relationships formed online.

According to Ghani, young perpetrators, some influenced by extreme pornography, said they did not understand their abusive behaviour was wrong.

Khan said that children need sufficient guidance from society and parents on the parameters of acceptable sexual behaviour. "We have left children to navigate their way through online pornography and decide what is right and what is wrong," he said. "Even parents who provide loving homes don't necessarily know how to keep their children safe online.

The full report from Barnardo's will be available from 11 July.