The proposals will require offenders to register their email addresses with the police. Social networking sites will then monitor and, in some cases, even block access to the websites from these email addresses.
Those who do not give police their address - or give a false one - would face up to five years in jail.
Home Secretary Jacqui Smith said the scheme, which will be implemented by the government's Child Exploitation and Online Protection centre (CEOP) in conjunction with ISPs, would help children to be "free from fear".
She told GMTV: "We need to patrol the internet to keep predators away from children in the same way as we patrol the real world."
However the scheme has raised some concerns, including whether offenders with multiple email addresses, some of which may not be registered, will be able to 'fool' the system. And some have question the effect the scheme may have on sex offenders.
"Sex offenders need to be encouraged to live good lives too, and stopping them using a technology that actually means they can't communicate with other adults... may rebound badly on those individuals," commented Donald Findlater, from the Lucy Faithfull Foundation, which works with survivors and perpetrators of child sex abuse.
Details of who would manage any lists of registered offenders' details are also sketchy. Annie Mullins, chairman of the Home Office task force on child protection and the internet, said the security of any list and how that list was transferred and managed by a third party must be investigated fully.
"They are concerns to industry, and these are something we would wish to talk to the government in some depth about, and be assured that they really understand the technology, and that the technology can deliver," she said.
Other recommendations in the proposals include making it more difficult for people registered over the age of 18 to search for users under the age of 18. The proposals also recommend that arrangements be made between the internet industry and law enforcement agencies to share reports of potentially illegal activity and suspicious behaviour.
See also: 29,000 sex offenders found on MySpace