Amber is seven years old and loves Miley Cyrus. She sleeps with a poster of the actress above her bed and stores all her most treasured possessions in a glittery purple box emblazoned with the image of Hannah Montana. She also likes watching music videos on YouTube and making up dances to accompany the songs of JLS, her favourite boy-band. But, most of all, Amber likes to collect stones. "This is my red collection," she says, unzipping her pink rucksack and carefully lifting out a series of rust- coloured stones. She lays them in a line on the carpet and looks at them proudly.

To all intents and purposes, Amber is a confident little girl with an array of enthusiasms and interests. But it is hard not to notice as she talks that her eyelids are powdered with gold eyeshadow. Her hair has been styled with two sparkly hairclips and she is wearing a pale pink dress studded with fabric flowers. Later, she will show me a certificate she was given for taking part in the Mini Miss UK competition earlier this year. Because as well as being a normal seven-year-old, Amber is also an aspiring child beauty queen.

Did she enjoy entering the beauty pageant? Amber thinks for a second and then nods her head. Will she be entering any more? "Yes." She pauses, a touch uncertainly. "If Mummy told me to."

The child beauty pageant circuit in the UK has seen a recent explosion in popularity. Although such contests are commonplace in America, where they have spawned a multimillion-dollar industry, they are a relatively new import to this side of the Atlantic. But in a Britain increasingly enamoured with the instant fame of reality television stars and image-conscious glamour models, demand for child beauty contests has risen exponentially.

Five years ago, there were no mini beauty pageants in Britain. Today, more than 20 are held each year with thousands of girls (and sometimes even boys) taking part. Many of the contestants are as young as five and one pageant excludes anyone over the age of 12. A typical beauty pageant will consist of several rounds, often including an "evening wear" section, where children parade down a catwalk swathed in taffeta and Swarovski crystals, and a talent round, in which contestants will display a particular gift, such as singing, dancing or baton-twirling. For a successful child beauty queen the rewards can be lucrative – the winner of Junior Miss British Isles can expect to pocket £2,500 – but it takes a lot of work. Sasha Bennington, 13, one of the most successful child beauty queens on the UK circuit, undergoes a gruelling beauty routine to keep up appearances and insists on a spray tan every week, a new set of acrylic nails each month and regular bleaching of her white-blonde hair. Unsurprisingly, Bennington's idol is Katie Price.

Chloe Lindsay: "I look at myself and go, 'wow'." Photograph: Suki Dhanda for the Observer

To their critics, such beauty pageants are exploitative, pressurising children to adopt semi-sexualised adult mannerisms that they do not fully understand and enforcing the message that physical appearance is all-important. Claude Knights, the director of child protection charity Kidscape, says that pageants "give young girls the signal that it's OK to value yourself along a particular, superficial dimension. It's not about the whole person." Yet many in the pageant industry insist it is a harmless pastime that instils young girls with confidence and self-esteem.

"I personally see pageants as a positive thing, especially with the ladette culture that we have," says Katie Froud, the founder of Alba Model Information, the UK's only independent modelling advice service. "I'd rather these girls were concentrating on keeping themselves fit, eating healthily, having good deportment and putting their hard-won pocket money into an outfit for a pageant than spending it all on the lash, out on the street."

Both sides of the debate will be examined in a forthcoming six-part BBC Three documentary series, Baby Beauty Queens, which gives a vivid depiction of the world of miniature tiaras and satin sashes: there are Fake Baked 11-year-olds with heavy false eyelashes and feathers in their hair; there are precocious six-year-olds performing provocative dance routines in tight-fitting, spangly outfits; there are young girls in lip gloss and mascara, their hair pumped up with hairspray and their eyes densely lined with kohl.

Entering a pageant is thus a time-consuming and costly process, involving entrance fees of up to £200. On top of that, parents can expect to pay several hundred pounds for suitably eye-catching outfits – from tailor-made mini-ballgowns laced with diamanté to the flamenco-style red-and-white polka-dot dress that Amber wore to compete in Mini Miss UK. "She had a fan and castanets to go with it," says Amber's mother, Sally, when I meet the two of them at their terraced home in Hampshire. "She had a bit of a tantrum when I gave her the castanets. I said, 'Amber, Spaniards are nothing without castanets!'" She throws her head back and laughs.

Sally, a vivacious 36-year-old former air hostess, entered the Yummy Mummy section of the contest alongside her daughter. She did not win, although she makes it clear she thinks this was an oversight on the part of the judges. "It's an obsession, really, of mine that one day I can be in the limelight," Sally says with a faraway gleam in her eye. "I can be famous. Why not? Sometimes I look at those people on the television and I think to myself: 'What do they have that I don't?'"

Sally is separated from her husband and is a full-time mother of two – Amber has a younger brother, Keanu, five. Isn't it expensive entering these contests on a tight household budget? Sally nods her head. "It is. If I was to do it again right at this stage, I couldn't. I'd be putting myself into even more debt. It's very expensive if you don't win. If you don't win, all you get is this…" She opens a glass-fronted cabinet and takes out a plastic silver tiara, holding it at arm's length and wrinkling her nose as though disposing of a freshly laid dog turd. "For what – 200 quid?"

Throughout this conversation, Amber is rushing around the sitting room sipping on a carton of Ribena and not paying much attention to what her mother is saying. I wonder if there was part of Sally that wanted to enter Amber into the pageant because of her own desire for attention. "I don't force her," Sally insists. "She's always wanted to be in front of the camera or on TV. She's been acting and dancing from the age of three. For us the pageant was a new experience. It was something different."

It is clear that Amber is a bright and charismatic girl, but does entering such a young child into a pageant encourage her to grow up too quickly? "I don't foresee any problem as to what I've done with my daughter personally," says Sally. "I don't allow Amber to wear mascara. If it's a special event, I do her eyes and give her a little bit of clear lip gloss, but she's beautiful as she is. She's a child and I believe that her beauty comes from within."

In the end, despite her obvious prettiness and natural charm, Amber did not win the Mini Miss UK title. Instead, she was awarded the prize for "Mini Miss Manners". "My heart broke when she didn't win," Sally admits. "I had some expectations of coming somewhere even if it wasn't the top winner." But when I ask Amber whether she minded not scooping first prize, she doesn't seem particularly bothered. "No," she answers, matter-of-factly. "I think I deserved to be a winner, not second or third. Someday I'll win." Sally nods approvingly, as though an important life lesson has been learnt. "Good girl," she says, beaming at her daughter.

In many ways, the rise in child beauty pageants can be linked to an increasingly pronounced cultural trend to treat young children as mini adults. Supermarkets have been criticised in the past for selling padded bras and pole-dancing kits aimed at children, while the popularity of scantily clad female bands such as the Pussycat Dolls among pre-teenagers would seem to suggest that girls are growing up far more quickly than they used to. In April, David Cameron (then Leader of the Opposition) spoke out against the "inappropriate sexualisation" of children and a slew of recent surveys have shown that young people are becoming progressively more concerned with their appearance, at the same time as their body image appears to be plummeting.

In 2009, a poll of 3,000 teenage girls showed that more than a quarter would spend their money on their looks rather than their studies, while one in five had considered plastic surgery. An Ofsted study of almost 150,000 children aged 10 to 15 found that 32% worried about their bodies, while a recent BBC survey highlighted the fact that "half of girls aged eight to 12 want to look like the women they see in the media and six out of 10 thought they'd be happier if they were thinner".

According to Claude Knights, the beauty pageant industry is, at root, about: "the commercialisation and sexualisation of childhood. These young girls are precocious. What they begin to do is look older, they acquire these veneers. They look assertive, they look confident, but how deep does that really go if it's built on such an ephemeral notion? Aesthetic, external attributes have a place, but they should not be the sole means by which a child should measure themselves."

Does she believe that such contests could encourage paedophilia? "There is a concern about that," Knights acknowledges. "We do know that predators or paedophiles continually tend to justify their interest in children by saying children are sexual beings. That children are now given a channel to become little Lolitas, to be portrayed as older, to almost become mini adults – these are all trends that give legitimacy to that kind of thinking."

In America, where the tradition of beauty pageants is far more entrenched, the industry has been overshadowed for years by the murder of six-year-old child beauty queen JonBenet Ramsey, who was found sexually abused and garrotted in the basement of her family's home in Boulder, Colorado, on Boxing Day 1996. The case is still unsolved.

In the UK, one of the most disturbing aspects of the child beauty pageant scene is that it remains almost entirely unlegislated. "There have been a number of pageants that have been set up, that get all the entrance money off the girls and then never run the competition," says Froud. "You literally can just say, 'I'm running a beauty pageant.'"

But Froud is also quick to point out that a properly run pageant can be beneficial. Many of them donate a slice of their profits to charity and, she says, the contests can promote "grace and good manners and wanting to do good… The girls who enter learn about focus and they can start to learn better behaviour."

In fact, many of the mothers and daughters I speak to are remarkably sensible and see beauty pageants as part of a well-balanced life, rather than the sole focus of it. Frequently, it seems that the children are the ones badgering their parents to enter rather than the other way round – one 10-year-old girl went door-to-door asking for sponsorship from her local community and raised £300 towards her pageant outfit.

It is an example that does much to challenge the beauty pageant stereotype of pushy parents and spoilt, doll-like children with glassy-eyed stares professing their fervent desire for world peace. In many cases, a contestant's personality seems to flourish under the spotlight in a way that mirrors the plot of the Oscar-winning 2006 film, Little Miss Sunshine. The movie poked fun at the child pageant scene but also used it as a backdrop for the seven-year-old Olive (bespectacled and slightly chubby) to revel in her own individuality. According to the girl's mother Sheryl (played by Toni Collette): "We have to let Olive be Olive." Indeed, for all that the film pokes fun at the meaningless ritual behind such contests, it is the pageant that ultimately brings Olive's dysfunctional family together.

When I speak to Telka DONYAI, 11, she comes across as eloquent, mature and level-headed beyond her years. For Telka, entering the 2010 Miss Mini Photogenic UK beauty pageant seemed to be a natural extension to the sorts of things she enjoyed doing anyway. She is already an accomplished actress who appeared in the BBC drama series Bonekickers and voices one of the three main characters in the CBeebies cartoon Kerwhizz. "Ever since I was younger I've been interested in acting and modelling," Telka says. "I came across this beauty pageant on the internet and spoke to Mum about it and said I wanted to give it a go."

Her mother, Bonnie, who was herself a child model in Iran, was supportive. "Telka's very intelligent and makes a lot of her own decisions," Bonnie says. "As she gets older, people are commenting that she's a very pretty girl and she's perhaps conscious that's another part of her. She's A/A+ in everything and I think she wants to challenge that cliché that if you're brainy you can't be pretty. She thinks you can have it all. So I think, for her, entering the pageant was mainly curiosity."

In the event, they were both left rather underwhelmed by their pageant experience. Bonnie, who had never been to one before, was shocked to find other mothers "pulling and pushing their kids' hair" and plastering make-up on to their faces. "It was an eye-opener," says Bonnie. "We didn't think she needed make-up."

Telka, meanwhile, acknowledges that "it was nice to dress up, but I didn't like the way really young children were putting on make-up. When you're a child, you're supposed to enjoy your childhood and have fun.

"I tried it but I don't think it's really for me," she continues. "I prefer acting because you have to think about acting. It is more of a challenge and I like a challenge. I dream about being famous, but I want to be famous for a reason. I want people to know my name for something I do."

But there are also girls who genuinely find that the pageant scene, far from making them anxious about how they look, actually boosts their confidence and their self-image. Eleven-year-old Chloe Lindsay from Belfast was bullied for years at primary school for being overweight. "I got called 'fat Barbie' and I had a lot of problems with my weight. I was thinking badly about myself. I had days where I might not eat or come out of my room, I'd just sit in my pyjamas and not want to do anything."

With her self-esteem at rock bottom, Chloe started attending a local dance school where a couple of her friends were already having lessons. Soon, she was entering "freestyle dance" competitions which take place almost every weekend in town halls across the UK. Contestants are required to dress up in flamboyant feathered and bejewelled costumes reminiscent of the Rio carnival. For competitions, Chloe wears heavy make-up, false eyelashes and has an all-over spray-tan.

"I like the dressing up because it makes me feel more confident in myself," she says. "I look at myself and go, 'Wow!' Just to know I'm going out there and looking brilliant, it makes you feel so pretty and gives you a lot of confidence."

Her mother, Helen, 32, admits she was worried at first that Chloe was dressing inappropriately for her age. "When she was younger, the make-up was an issue, but she was only doing it for the competitions. Over the past year or so, it's creeping into her everyday life, but I would only allow her a wee bit of mascara and gloss to go to school. The way I look at it, if it gives her a little confidence, it's worth it and now she's going to secondary school I don't want her to stand out for not wearing make-up as everyone else is. I only take it so far. She tortures me about dying her hair and that's an absolute no. She's too young."

And yet, however much entering pageants can prove to be a positive thing for sensibly minded and ambitious young girls with firm adult guidance, there are some who question whether children can ever truly be said to form their own decisions, independently from their parents. Frank Furedi, professor of sociology at the University of Kent and author of several books including Paranoid Parenting, says that modern parents are encouraged to make a heightened emotional investment in their children and to view them as extensions of themselves. "Parents tend to adopt an extremely narcissistic view so every time a child shows the slightest interest in anything they seize on it. If little Johnny picks up a violin, he's going to be a composer. If little Mary is a gymnast, she's going to win gold at the Olympics. With the powerful impulse towards celebrity culture, the parental impulse becomes unrestrained.

"No child is entirely autonomous. If a child says 'This is what I want to do,' it's generally not 100 miles away from what the parent wants. It's relational decision-making rather than a strong-willed child making decisions totally on their own. These pageants are not for children to entertain other children. What one sees here is adult fantasies fuelling this thing. It's for adults. It's a couple of steps up from Crufts."

Still, it is hard not to dismiss the sneaking suspicion that at least part of the opposition to pageants in this country stems from a class divide – the idea that there is something a bit tacky, a bit infra dig about parading one's children on the stage rather than doing the comfortably middle-class thing of taking one's little darlings to piano lessons or entering them for chess tournaments. Last year, a study into child beauty pageants in the US for the Harvard University Gazette questioned 41 mothers who participated in an average of five pageants a year. The researcher, Hilary Levey, concluded that mothers of lower income and poorer education entered their children into the contests because they wanted them to learn the proper skills necessary to move up the social scale. One mother was quoted as saying: "I want my child to be aware that there's going to be somebody better than her. It's a hard thing to learn – it was for me – and I want her to start early." Another mother saved any prize winnings in a college fund for her daughter.

"I think there is a class issue," says Furedi. "In America it's seen as a white trailer-trash kind of thing and there's real contempt for that. But if you come from a middle-class background and shove your child into music lessons, that's OK. Parental aspiration acquires different forms, but it's a very similar kind of impulse."

And given that we live in a world that increasingly values physical appearance, is there anything so very wrong in teaching one's children how to make the best of themselves, how to get ahead in life? Only this year, Catherine Hakim, a senior research fellow in sociology at the London School of Economics, wrote a paper for the European Sociological Review that stated "erotic capital" was the key professional attribute of our times. "Erotic capital goes beyond beauty to include sex appeal, charm and social skills, physical fitness and liveliness, sexual competence and skills in self-presentation, such as face-painting, hairstyles, clothing and all the other arts of self-adornment," wrote Hakim, before suggesting that those possessing this elusive quality could expect to earn 10-15% more than those without it.

One mother interviewed for the BBC documentary puts it more succinctly when talking about her six-year-old daughter competing in a pageant: "All the while I was pregnant I was [thinking] 'Oh please let her be lovely, please let her be lovely,' because it does open more doors. I don't care what anyone says and I'm not saying I think this is right, but there are surveys that actually state that prettier people will get more doors opened for them."

It might be depressing to think that our children are growing up in a world that places an ever greater value on appearance rather than substance, but if it is the case, then child beauty pageants are, perhaps, a natural extension of the trend.

Back in Hampshire, Amber is putting away her collection of stones with great care. Each one has its own specific compartment in the pink rucksack so that she knows exactly where to find it. She hands me a tiny, smooth, toffee-brown pebble. "This one's my favourite," she says, turning it over in her hands. Why, I ask? Amber looks at me and then looks at the stone in the palm of her hand. "Because it's pretty," she says, and it seems like the most obvious answer in the world.

Baby Beauty Queens begins on BBC Three on 20 July