Government departments have been told to pull all advertising from YouTube, after it was revealed paedophiles are sexualising children on the website.

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Companies in New Zealand and globally have been abandoning the internet giant after an extensive number of sexual comments posted on innocent videos of children was exposed.

Disney and Nestle pulled advertising, as did Spark and TVNZ in New Zealand.

TVNZ CEO Kevin Kenrick said future advertising on YouTube has been paused "until we've got greater certainty that the environment is going to be a safe environment for our brands and the stories we want to tell".

This morning the Government's Inland Revenue Department (IRD) was still running an advertisement on YouTube.

However after 1 NEWS made inquiries about using the platform for advertising, IRD pulled its advertisements on the site.

"Inland Revenue has joined a growing list of organisations to pull advertising from YouTube," a spokesperson told 1 NEWS. "We have decided not to continue advertising on the site until YouTube can assure us they have sorted their issues."

New Zealand Transport Agency (NZTA) had quit YouTube last Thursday, as soon as it was "aware of the issues relating to YouTube's unintentional promotion of predatory material".

"Our advertising will only restart if we are satisfied that Google's actions taken to address the problem are sufficient and will be effective," a Transport Agency spokesperson told 1 NEWS.

State Services Commissioner Peter Hughes, who is in charge of Government Departments, said it was "not appropriate for a government department or agency to advertise on a platform where children are at risk of being exploited".

After 1 NEWS inquiries, Mr Hughes asked all Government department chief executives "to review their advertising on YouTube with a view to suspending advertising".

He also instructed the Department of Internal Affairs to investigate the issue and "get a better understanding of YouTube’s response to the issue".

Now that its advertisers are fleeing, YouTube has taken action by suspending comments on millions of videos, including most videos that feature children.

A YouTube spokesperson said over the past week they have taken a number of steps to better protect children and families.

"Now, we will begin suspending comments on most videos that feature minors, with the exception of a small number of channels that actively moderate their comments and take additional steps to protect children.

"We understand that comments are an important way creators build and connect with their audiences, we also know that this is the right thing to do to protect the YouTube community."

Netsafe expected the action to "take a little while" to roll out due to the high number of videos on YouTube.