He said that although police were arresting over 400 men every month for viewing indecent images of children this was just “the tip of the iceberg” and that a new approach was needed.

“We’re able to asses whether a paedophile viewing indecent images of children is posing a threat of contact abuse and in circumstances where that individual does not pose a threat of contact abuse they should still be arrested, but we can then look at different disposal orders than going through the formal criminal justice system,” said Mr Bailey.

“They will still become a registered sex offender and that means that they’re still being managed. But that gives us the capacity to deal with the scale and the volume of referrals that we’re consistently getting.”

The number of child abuse reports has mushroomed by 80 per cent in the past three years, with police receiving an average of 112 complaints a day.

There are more than 70,000 complaints into child abuse a year and police forces are also preparing an estimated 40,000 reports of abuse from the Independent Inquiry into Child Sexual Abuse, which began hearing evidence on Monday.

Mr Bailey said: “We’re struggling to maintain the capacity and ability to deal with the increasing numbers that are coming through. We just can’t cope with it.”

He added: “There are tens of thousands of men seeking to exploit children on line with a view to meeting them with a view to then raping them and performing the most awful sexual abuse on them. That's where we believe the focus has got to be, because they’re the individuals that pose the really significant threat.”

Mr Bailey earlier told The Times: "Let's be really clear: somebody going online and using their credit card to direct the abuse of a child in the Philippines should be locked up, categorically.

"That individual who is not in contact with children and doesn't pose a threat to children and is looking at low-level images ... when you look at everything else that's going on, and the threat that's posed of contact abuse to children, we have to look at doing something different with those individuals.”

But welfare groups have voiced their fears that Mr Bailey’s proposals will be interpreted as a liberalisation and watering down of child protection laws.

The NSPCC said: "It is clear from these staggering levels of recorded child sex offences that police have a huge number of cases to investigate, often with limited resources.

"Prison sentences serve a vital purpose in reflecting the severity of the crime, protecting the public, acting as a deterrent, and helping a victim see their offender deservedly brought to justice.

"But we cannot arrest our way out of the situation – if we are to stem this tide and protect more children we must make prevention and rehabilitation a priority.

"With the right support we can prevent offenders from abusing and help those who do harm children change their behaviour."