Paedophiles are creating virtual lives for themselves online so that they can act out their sexual fantasies with young children in chilling detail.

The characters that they create, known as avatars, are able to go into sites that are hidden from general view and take part in illegal acts including torture and rape.

On one site, Second Life, there is an area called Wonderland where young children can be seen in a virtual playground where they offer sex. Other areas offer characters the chance to rape women in clubs and dungeons. Undercover officers at the Child Exploitation and Online Protection Centre (CEOP) have gone into a number of the sites to check for any threats to children.

The content of the game is generated by players and there is nothing to suggest that Linden Lab, the company based in San Francisco that created the software in 2003, is aware of the activities.

Wonderland was the name of a private internet club, broken up by police in 1998, where more than 200 paedophiles in 13 countries had exchanged more than 750,000 images of child sex abuse.

The Government is reviewing proposals to make it an offence to possess computer-generated images of children being sexually abused.

A spokesman for the Ministry of Justice said: “While real children are not sexually abused through the creation of these images, we are concerned that they could fuel the sexual abuse of children by reinforcing abusers’ feelings towards them, or for ‘grooming’ or preparing children for sexual abuse.”

The CEOP opened a behavioural analysis unit yesterday, designed to get into the minds of paedophiles. Detectives have conducted interviews with hundreds of convicted child sex offenders across the country that will allow them to build criminal profiles, identify patterns of behaviour and provide an insight into the minds of paedophiles to give them an edge during interviews with suspects.