Labour is also worried that such large numbers of working children could undermine its educational plans - homework clubs, for instance, could founder if pupils are too busy modelling or selling shoes.
New controls which come into effect in February will stipulate that children must have two weeks free of work during school holidays, and set new national limits for working during terms (at present, councils can set different limits).
Children under 15 will be able to work two hours on weekdays, five on Saturdays, two on Sundays. All this will rather belatedly bring Britain into line with an EC directive on young people at work.
The law on children working on the stage or film is also to be adjusted to include those employed in modelling and advertising - at present children on TV or film are well protected, but there is a loophole for children modelling for catalogues or featured in press adverts.
At present, 43 per cent of 13 to 16-year-olds (compared to an EU average of 14 per cent) have paid employment of some sort, and 75 per cent of these will be working illegally, according to the National Child Employment network.
Jim McKechnie, a lecturer in social science at Paisley University, has just published a book on child employment in Britain. He said that we have become complacent about child labour, and that the situation is much worse than it appears.
He said: "Many people think it is something that used to happen in Dickens's time and assume that everything is OK now. But we are naive if we think we are controlling child employment."
Most people, he said, equate child employment with paper rounds. But during his research he found large numbers of children working in hotels, cafes and shops, and small but significant numbers working in garages, building sites, sawmills and even on trawlers.
There is also, he says, a tendency to assume that all teenage employment is an enriching learning experience. He found that those who worked around five hours a week did better in exams than non-workers, but when this rose to 10 or more, school performance deteriorated. "Getting up at six on a winter morning to do a paper or milk round doesn't really increase social skills, and could be dangerous."
A recent report from the Child Accident Prevention Trust adds to these worries. "Employers' associations have taken very little action on the health and safety of very young workers." The trust warns that young people are more likely to be injured at work because they are usually untrained and often have a nonchalant attitude to risks. Young people nearly always work on a casual basis, so injuries are less likely to be reported to the Health and Safety Executive.
The Government has also promised a general review of child employment before the end of 1998. A working party will review the hours and type of work children are allowed to do and recommend ways of safeguarding children's health and safety at work.
Child Employment in Britain: a social and psychological analysis by Jim McKechnie and Sandy Hobbs. Published by the Stationery Office