Tens of thousands of children are being arrested every year but only one in three gets taken to court, figures show.
Almost 250,000 children aged 10-17 were arrested in 2009, including almost 28,000 under 14, but only 81,500 were sentenced by a court and 5,176 were jailed.
The Howard League for Penal Reform said the figures showed "an excessive and inappropriate use of arrest for children".
It warned the situation could deteriorate if police and crime commissioners, which will be elected to oversee forces for the first time next year, see children as an easy and popular target to boost arrests.
Frances Crook, the charity's director, said: "Children are 'low-hanging fruit' which partly accounts for their extremely high arrest rates when the police were forced to work to targets.
"A police commissioner would find it more electorally enticing to run a campaign aimed at the easy arrest and detention of children rather than devoting resources to crimes that appeal less to the local media or populace. Anyone who is the parent of a child will understand how upsetting it would be to find that your son or daughter has been arrested.
"Showing up at the police station to pick up your child is not something that anyone should have to do needlessly. The impact on the child of unnecessary arrest should not be underestimated.
"This excessive use of arrest puts a huge burden on the police who have to do all the paperwork and tie up valuable time and money dealing with young children when they could be dealing with burglaries, rapes and serious disorder."
Children are entering the criminal justice system when their behaviour should instead be a concern for their families and the welfare system, the charity said.
A Government spokesman said: "Criminal acts, committed by young people or old people, cause serious harm to victims and communities. It is vital that police officers have the powers to arrest the perpetrators. Just because an arrest does not lead to a prosecution does not mean that the arrest was unnecessary or inappropriate."