Dale Tolliday, clinical advisor to New Street Services, which treats children who engage in sexually harmful behaviour towards others, said he had noticed a rise in cases involving sexual penetration since the late 1990s.

Previous research had found sexual abuse involving siblings was more likely to involve penetration than assaults of peers. The most recent evidence shows that cases of peer assault were just as likely to involve penetration as sibling assault.

Mr Tolliday​ said more than 40 per cent of peer assault cases referred to New Street involved sexual penetration.

"We believe it is due to the availability of explicit material online," he said.

New Street Services provides therapeutic treatment in Sydney, the Hunter region and Western NSW with a new hub to open in the Illawarra region.

Children who are referred to the service are aged between 10-17 and have engaged in sexually abusive behaviour towards others but have not been charged.

Figures from the NSW Bureau of Crime Statistics and Research shows the number of sexual offences committed by juveniles is up almost 11 per cent each year for the past five years.

Joe Tucci, chief executive of the Australian Childhood Foundation, said that when their programs began the majority of children were engaged in less serious sexual abuse such as touching over clothes or lewd behaviour and language.

Most were victims of sexual abuse and were mimicking what they had endured.

Now, about 60 per cent of children referred have no history of abuse and the behaviour they engage in is more extreme.

Mr Tolliday​ said the average age of offenders who are charged is 16 whereas the average age of children using New Street Services is 13.

"For us that's really pleasing because we want to be an early intervention strategy," he said. "We want to get in there before the behaviour becomes repetitive or ingrained."

Children and their families spend two years in the program which has a high success rate. Only one or two per cent of children who undergo the program re-offend.

Mr Tolliday​ said a significant proportion of children who engage in sexually harmful behaviour towards others have been victims of trauma themselves.

"But there is another bunch of kids who haven't got identified trauma where the most significant factor we can find is exposure to explicit material," he said.

"We see quite a number of children who, in all other respects of their lives are in good shape, but have been exposed to this material and sometimes watch it a great deal for long periods of time and that's led them to become dislocated and isolated."

Social commentator Melissa Tankard Reist, co-founder of Collective Shout For A World Free of Sexploitation, said a tipping point had been reached and government regulation of online pornography was needed.

"How much worse does it have to get? How many more five-year-olds do we want to have in treatment programs until we say maybe it shouldn't be a free-for-all where kids can access torture porn and rape porn and incest porn? Children are being groomed to think this stuff is normal."