A legal blunder made 25 years ago has left retailers free to sell DVDs and computer games containing scenes of pornography or extreme violence to children.
A technical loophole means the Video Recordings Act, which places statutory requirements on all DVDs and videos and some video games to be classified and age rated, is no longer enforceable in UK courts.
This opens the way for ultra-violent, hardcore and banned material to be legally sold to anyone, including children.
Dozens of prosecutions for alleged breaches of the 1984 VRA have been dropped because of the mistake.
Culture, Media and Sport Minister Barbara Follett wrote to industry bodies yesterday saying a "serious issue" had come to light over the Act, which also covers restricted adult movies which can be sold only in licensed sex shops.
Ms Follett said the then government failed to notify the European Commission about the legislation's classification and labelling requirements.
"Unfortunately, the discovery of this omission means that, a quarter of a century later, the VRA is no longer enforceable against individuals in United Kingdom courts," she added.
The error by Margaret Thatcher's government was seized upon by the Liberal Democrats, who said it had left film censorship in chaos.
The party's culture spokesman Don Foster said: "The Conservatives' incompetence when they were in government has made laws designed to prevent video piracy and protect children from harmful DVDs unenforceable and thrown film censorship into chaos."
A Department for Culture, Media and Sport (DCMS) spokeswoman said retailers had agreed to observe the regulations on a voluntary basis.
Ministry of Justice figures for 2007, the latest available, show 87 people were convicted under the Act for offences including supplying material which should be sold only in sex shops and selling unclassified work.
The DCMS spokeswoman said previous convictions under the Act would stand despite the discovery of the technical flaw in the legislation.
SKY