The deputy chief executive of the Child Exploitation and Online Protection (Ceop) centre has warned the internet "amplifies" the opportunities of paedophiles for abuse.
Andy Baker told ITV News, "They send out hundreds if not thousands of emails to children they spotted on social networking sites - they've seen their profile, they research them, and they also contact them as if they know them."
Mr Baker said the paedophiles then "dupe" the children into believing that they are around the same age and "pretty quickly" ask to see explicit pictures of them.
"Once you pass over that photograph that's it - that's the start of this real sexual extortion and demand, and then the fear kicks in," he added.
Paedophiles create fake online personas to pose as children, even geographically researching the areas where they wish to target victims, and persuade them to share sexual images or perform sex acts on camera.
They then threaten to share the pictures or footage with the victim's family or friends, and force them to perform more extreme sex acts on camera, and even harm themselves.
Ceop deputy chief executive Andy Baker said:
Children as young as eight are being targeted, being blackmailed, being extorted, being forced, being coerced, to perform slave-like acts through the internet, on webcam.
It is sexual and degrading, some are being forced to cut themselves and write on their naked bodies.
There has been an increase in children self-harming, seriously self-harming, and seven children in the last couple of years have taken their lives.
Experts believe British children are targeted because of the accessibility of the English language and because foreign abusers believe the liberal nature of UK society makes it an easy target.
Ceop operations manager Stephanie McCourt said:
First of all it's the English language. They are able to threaten the children if they can communicate to them. English is a really popular universal language.
Second of all, the offenders have actually said that because they perceive the UK as a very free and open and liberal society, they think that they will have more success in targeting UK children.
Internationally, seven committed suicide, including 17-year-old Daniel Perry from Dunfermline in Fife, who died on July 15 after being tricked into thinking he was talking to an American girl online.
Another seven seriously self-harmed, of whom six were from the UK, Ceop said.
Hundreds of British children are being blackmailed into performing sex acts online by paedophiles who threaten to send obscene images of the victim to their family and friends.
Investigators from the Child Exploitation and Online Protection (Ceop) centre said children as young as eight have been targeted and are being driven to self-harm and suicide by their abusers.
In the past two years across 12 investigations, 424 children worldwide have been blackmailed in this way, of whom 184 were from the UK, Ceop said.
The Child Exploitation and Online Protection (CEOP) Centre has created a new interactive film, First to a Million which focuses on young people who post video content online.
The film highlights how quickly uploaded internet material can spiral out of control and where young people can get help if it does.
The video deals with a range of scenarios that young people might face, including sexually explicit material.
Research shows that 88% of self-generated, sexually explicit online images and videos of young people are taken from their original location and uploaded onto other websites.
CEOP's video can be viewed here: