Tens of millions of pounds are being wasted because the Ministry of Defence (MoD) continues to recruit "child soldiers" who are more likely to drop out of the armed forces, according to a report.
Soldiers under the age of 18 are also being jailed after going absent without leave (AWOL), despite a policy which gives commanding officers the discretion to discharge "unhappy juniors", said the Coalition to Stop the Use of Child Soldiers.
The UK is one of fewer than 20 states, including Iran, North Korea and Zimbabwe, which still recruits 16-year-olds into the armed forces.
The campaign group, which is calling on the Government to raise the recruitment age to 18, said it was not right that young recruits could be sent to the frontline on reaching the age of 18 on the basis on an enlistment contract signed at the age of 16 or 17.
The report noted that last year 27% of under-18 recruits dropped out of initial training compared with an average of 18% across all age groups. And of the 4,675 16 and 17-year-olds who joined the armed forces, 1,485 (32%) left the same year.
There was also a spike for personnel being discharged at the age of 22. Under-18s have a right of discharge at the end of the first month of training and before sixth months have elapsed since enlistment, but after this cooling off period 22 is the first point they can end their contract.
Based on recruitment and training costs for an infantryman of £31,000, the campaign group calculated about £46 million was spent on the 1,485 under-18s who left the armed forces in 2010.
Given that those under 18 are barred from deployment to the frontline, the report said: "Recruiting only candidates aged 18 and above would increase current deployable infantry strength alone by 3.6% with no financial cost to the Ministry of Defence.
"This would help achieve one of the aims of the Strategic Defence Review - to 'improve the ratio of personnel who are available for deployment against overall personnel numbers'."
The MoD has said it is "exceedingly rare" for a young recruit to be refused permission to leave and it is not aware of any cases where somebody under 18 has been unable to do so. However, the campaign group said while all discharges are recorded, refused discharges are not.