Children are being trafficked into the UK from Africa and used for human sacrifices, a confidential report for the Metropolitan Police suggests.
'Adam' is believed to have been killed in a ritualistic murder
Children are being beaten and even murdered after being labelled as witches by pastors, the report leaked to BBC Radio 4's Today programme said.
Police face a "wall of silence" in investigations because of fear and mistrust among the groups involved.
It follows the case of a girl who was accused of witchcraft by her guardians.
Three people, including the girl's aunt, were convicted of trying to "beat the devil out of" the un-named 10-year-old - originally from Angola.
The report was commissioned by the Met after the death of Victoria Climbie in February 2000 and because of concerns over so-called faith crimes.
The 10-month probe was also intended to be part of efforts to "open a dialogue" with Asian and African communities to prevent child abuse in the London boroughs of Hackney and Newham.
Information was gathered with the help of social workers, human rights lawyers and race relations experts from within these ethnic minority groups.
Today programme reporter Angus Stickler, who obtained the police report due to be published later this month, described it as "absolutely chilling".
"The most gruesome details come from the African communities," he said.
"This report talks of rituals, of witchcraft, being practised in churches in London. It is described as big business."
It said that people who are desperate seek out churches to cast spells for them.
"Members of the workshop said for spells to be powerful it required a sacrifice of a male child unblemished by circumcision," the report said.
Contributors said boys were being trafficked into the UK for this purpose, but did not give details because they said they feared they would be "dead meat" if they told any more.
There were also claims that youngsters were being smuggled into the UK as domestic slaves and for men with HIV who believed if they had sex with a child they would be cleansed.
One HIV outreach worker who spoke to the BBC News website said a small minority of Africans who came to his sessions had begun to mention this as a possible solution to their problems.
The authors of the report point out that these claims are only allegations.
They also claim that children could be in "serious and possible life-threatening situations".
It is not clear how widespread the practices are within African communities, but those working with minority groups suggest it is fairly small-scale.
The report also spoke of a wide gulf between child protection agencies and those in the communities involved, which means people are reluctant to get in touch with the authorities.
Police described this as a "wall of silence" prompted by concerns that individuals would be "betraying" their family, community and faith if they spoke out.
It also acknowledged the sensitivity of the issue as the abuse was a product of individuals' faith and beliefs.
Independent adviser to the Met John Azah said that since the Climbie case and the ritualistic murder of a black child known as "Adam", there were concerns the police were only touching the "tip of the iceberg".
"A few weeks ago the Met put out a number of 300 black children missing from schools.
"There's no evidence that any of these children have been traced.
"Therefore perhaps there's something terrible happening out there which we are not aware of."
This was why the police, quite rightly, were doing quite a lot of work to see if children were being murdered or not, he added.
But Dr William Les Henry, a lecturer in sociology at Goldsmith's College, said there was an element of racism about the report.
He said: "The model that they're based on, they always seem to base their models on the fact that Africans are less civilized, less rational, so their whole systems of rationality are irrational."
Home Secretary Charles Clarke said it was important countries worked together to tackle crimes related to people-trafficking.
The Met had a special unit to address these particular issues, he said.
"But it's classically an issue, like all people-trafficking issues, where people are being moved across the whole world, essentially for money, by very substantial criminal organisations."
The challenge was how could the organisations most effectively be contested, he said.
Sita Kasanga was one of three people who tortured a girl she believed to be a witch
The report called for the social services department to determine how many faith organisations exist and where they are situated.
But Pastor Nims Obunge from the Freedom's Arc Church emphasised that most African churches were entirely legitimate and overseen within a wider structure.
"We do not condone any form of cultish practices and I think we need to define the difference between a cult and a church, that's an important thing and I'm a bit wary when we use the term 'church' in a loose fashion."
The report also urged the Met to highlight the work of child protection agencies to try to encourage the reporting of crimes.
The Met said the report was drawn up after workshops debating issues such as female genital mutilation, physical chastisement, forced marriage and faith-related child abuse were held.
It added: "The recommendations in the report are being carefully considered at the highest levels in the MPS in conjunction with partner agencies and community groups."