The Children's Commissioner says gangs are responsible for raping thousands of teenage girls and that urgent action is needed to curb what is seen as a growing problem.
The report warns that it has been "rare to identify cases of child sexual exploitation where the use of technology has not been a factor". Pornography is also regularly seen as a factor contributing to abuse, the commissioner says.
Senior government sources described the report as "hysterical and half-baked" in an unusual intervention by ministers on such a sensitive subject.
The report is published amid growing public concern over the extent of child sexual abuse after the accusations surrounding Jimmy Savile. David Cameron recently agreed to establish several reviews into sexual abuse at a children's home in North Wales after Lord McAlpine, the former Conservative Treasurer, was wrongly accused of being a paedophile.
Ministers are understood to be growing increasingly alarmed that today's official report, which follows a lengthy inquiry by the Children's Commissioner, risks adding to unnecessary concern by using questionable statistics.
The Children's Commissioner highlights the "conspiracy of silence" which allowed Savile to "rape children with impunity". However, it adds that it is "too easy to simply blame the BBC" as the problem was far more widespread.
In 2010, the Children's Commissioner, a government body, started an inquiry into child sexual exploitation in gangs and groups following growing concerns over the extent of the problem.
Its interim report, published today, studied abuse of children over 11, or those who had reached puberty. A survey of police forces and local authorities found that in the past 14 months, 2,409 children were victims of sexual exploitation. There were 1,514 perpetrators.
However, the official criminal records were judged to be an "undercounting". The Children's Commissioner estimated that "at least 16,500 children were identified as being at risk of child sexual exploitation during one year".
The report details how abusers are using social networking websites to contact children. Teenagers being abused are also threatened that images of them will be distributed online if they stop cooperating. In other cases, phone numbers or pin numbers of girls labelled as "easy" were shared by perpetrators.
The report concludes: "The use of mobile phones, social networking sites and other forms of technology are highlighted in the report as channels through which perpetrators groom, bully and pursue victims."
Some government sources are concerned that the statistics are not suitably robust and have raised concerns that the issue risks being "sensationalised". They also believe that the report has failed to address the issues surrounding rings of Asian male paedophiles.
The report contains figures showing that about a third of men convicted of sexually exploiting children were of "Asian" origin.
Sue Berelowitz, the Deputy Children's Commissioner, insisted the "model" of Asian men abusing white teenage girls was only one among a wide range of unacceptable behaviour.
She added: "When people focus on that one model they are unfortunately not identifying all victims because they think that all victims are white girls." The Deputy Children's Commissioner, supported by a panel of experts, is due to make her final recommendations in the autumn of 2013.