After a couple of minutes, two young boys approach the tourist. Then two more appear, an older boy holding on to another of no more than four or five. He is carrying a bundle of possessions in a plastic bag. The meeting has obviously been prearranged. The tourist calmly takes the hands of two of the younger boys, one of whom is wearing the tourist's motorcycle helmet. The older boy walks slightly in front of them. Few words are exchanged and the group moves off. The children look happy, skipping along the pavement to keep up.

Cambodia is a country that has gained a reputation as a haven for sex tourists. Phnom Penh is described by some as "one giant brothel". As in other countries, there is a spectrum here. At one end are women who have decided - in the absence of other choices - to engage in sex work. At the other are children who are used against their will for the sexual gratification of adults.

We follow the group through a maze of back streets, then lose them as they enter a fairground. Perhaps the tourist's intentions are honourable, perhaps he is not a paedophile. Later, we show photographs of the group to Stephanie Remion, director of Action Pour Les Enfants, an NGO (non-governmental organisation) that tracks tourists who come to Cambodia to sexually abuse children. "Yes, I think I recognise these children as ones who have been exploited by paedophiles before," she says. She doesn't recognise the man.

In a country ranked among the 20 poorest in the world, dollar income from prostitution is highly valued, particularly by the pimps and brothel owners. A virgin of 12 or 13 can be sold to a brothel for $500 (£280). A foreign tourist who wants to hire her for several days can expect to pay around $1,000 (£560). The money paid to street boys and their fixers varies, but is far more than the children earn from months of begging and scavenging. So lucrative is the trade that many who should be policing or prosecuting this kind of activity accept bribes to cast a blind eye. The average salary of a police officer is around $25 (£14) per month.

Those in pursuit of girls can usually find them in brothels; those who want boys tend to recruit them directly on the street. Phnom Penh alone has an estimated 24,000 street children; many live with their parents, but 2,000 have little or no contact with their families and are willing to do almost anything to earn their next meal. The boys picked up by paedophiles tend to combine this "part-time" work with shoe-shining and scavenging for recyclable rubbish.

Sex for sale, and Aids, became established here in 1992 when Untac (UN Transitional Authority in Cambodia) arrived to stabilise the country following the devastation of the Pol Pot era and the subsequent Vietnamese occupation. Nowadays, a guesstimate puts 2.6% of the 13m Cambodian population as infected with HIV - although the real figure is likely to be higher - and at least a third are thought to be children under 18.

Bopha found herself in a brothel two years ago, at the age of 15. By that time, Untac had gone and the soldier sex buyers had been replaced by Cambodian men and foreign tourists. It all started for Bopha when she was 14 and fell in with a bad crowd at school who encouraged her to play truant, ride motorcycles around Phnom Penh and sing in karaoke bars. She comes from a poor family, but her new friends always had money available.

She is 17 now, and thin and frail. She looks too weak even to cry as her mother, Nuch, strokes her hair. She and her mother have moved into the home of her sister in a village on the outskirts of Phnom Penh. The dirt track is lined with small, ramshackle houses, most without electricity or running water.

Bopha recalls how she ignored her mother's pleas to concentrate on her studies. One day her friends proposed a trip to the coastal town of Kampong Som, instead of going to school. She readily agreed, and she and three companions, two boys and a girl, spent the day lying on the beach and exploring the town. Her friends found a guesthouse for the night and told her they'd be back shortly with some dinner. But they never returned. She discovered that the guesthouse was a brothel - her so-called friends had sold her for $400 (£224).

The brothel owner told Bopha she'd have to work off her "debt". The woman was married to a policeman, but he was rarely seen at the brothel. Bopha was paralysed with horror - she barely knew what sex was. "The first night a large man came into my room and raped me. After that I was forced to receive between five and 10 customers a day. Some of the men said they felt sorry for me because I was so young, but it didn't stop them having sex with me and none of them helped me to escape."

Cambodian men had sex with her at the brothel, while western men preferred to take her to their hotel rooms. "The brothel owner's nephew used to accompany me with a translator to the hotels of the white men. Sometimes they put pornographic films in the video machine and tried to make me copy what was going on. If I didn't do what a customer wanted, he would go out of the hotel room and tell the translator ... Then the nephew would beat me. The western men always asked for the youngest girls with the darkest skin, and they didn't want to use condoms."

At the brothel she became sick with fever and diarrhoea. A doctor diagnosed typhoid and prescribed medication, which didn't help at all. Bopha made various unsuccessful attempts to escape, but one day, when she was outside washing clothes, a taxi driver offered to take her to the bus station and gave her money to get home. Her mother was delighted to be reunited, but shocked by how ill Bopha was and took her to hospital. HIV was diagnosed. A social worker from World Vision, the largest NGO in Cambodia, approached her while she was in hospital and offered the family a lifeline. They were given a sewing machine and now make a modest income from sewing sarongs. But Bopha has little hope for the future. "Before I was diagnosed with HIV, I didn't know what it was. Now it has made me so weak that the next time I have diarrhoea, I'm scared I'll never get out of bed again."

Poverty is the immediate impetus for the sex trade, but the legacy of Khmer Rouge rule in the late 1970s, which resulted in the genocide of between 1.7m and 2.2m Cambodians, has also played a huge role. Under Pol Pot, the Khmer Rouge outlawed family life, most possessions, education and intellectuals. Forced labour became mandatory and children as young as five were separated from their families and put to work.

Cambodia today is eerily empty of older people. Sixty per cent of the population is now under 24 and more than half the population is believed still to suffer from post-traumatic stress disorder. Such is the fear of a coup by another Pol Pot that some have moved close to the borders so they can quickly escape.

In this still-shattered country, tourism is a vital source of income. Cambodia has obvious appeal to visitors - an "undiscovered" destination with stunning temples and beautiful beaches. There is also its macabre recent history, documented at the genocide museum and at the Killing Fields. Above all, there is Cambodia's growing reputation as a sex tourism destination. This is a country where those who exploit children can get away with it. The governments of Thailand and the Philippines, traditional hunting grounds for foreign paedophiles, have strengthened laws to protect children; the Cambodian government, too, has pledged to take a tough line but, in practice, widespread corruption allows many to escape justice. Stephanie Remion says that the going rate to escape punishment for paedophile crimes is $20,000 (£11,200).

One foreigner living in Cambodia was arrested then released without charge, despite police finding thousands of sadistic pornographic images of Cambodian children in his possession. In another case, a tourist was caught in his hotel room with a group of young boys, his camera loaded with incriminating pictures. The case went to court but a judge cleared him. Subsequently, human rights activists lodged an appeal and the man was convicted of debauchery and sentenced to 10 years. Now he is appealing.

According to researchers Julia O'Connell Davidson and Jacqueline Sanchez Taylor, who specialise in the study of sex tourism, not all the sex tourists who visit the bars are hardened paedophiles. Some are opportunists who delude themselves about the child's true age or the nature of the child's consent.

O'Connell Davidson and Sanchez Taylor have identified three categories of sex tourists: Macho Man is often young, semi-skilled, travels in groups and is likely to visit prostitutes in the UK; Mr Average is usually older and interested in simulating a relationship; and Cosmopolitan Man views himself as a worldly-wise traveller visiting offbeat locations who would not buy sex elsewhere in the world. One reason these men end up with children under 18 may be because they're so highly represented in the sector.

The underage girls who work in brothels are often illiterate. They usually move from countryside to town to find work to support their families, begin with a legitimate job at a restaurant or market, maybe, then get tricked into the brothels with inducements of earning much greater sums of money. Because they have been sold for several hundred dollars, and have to "repay" the purchase price, they rarely see the money they earn.

Neang was 14 and her sister 16 when their mother remarried. Her new husband stopped working and took up drinking, and the girls collected firewood to sell locally to help feed the family. One day a neighbour told them there were jobs going in a soup restaurant in a town some distance away where they could earn far more. The girls left without telling their mother, intending to send home their earnings. Both got jobs, Neang with a salary of $10 (£5.50) a month, her sister $12 (£6.50). At first the work went well, but after some weeks the restaurant owner forced Neang's sister to go off with a customer in his car. "She was gone for five days and when she came back she was holding her stomach and complaining she felt sick. She told me the man was a customs officer who kept her captive in a hotel room for five days."

Neang discovered that all the girls who worked at the restaurant were forced to have sex with customers, and after three months she, too, despite her screams of protest, found herself bundled into a customer's car. "The man drove me to Phnom Penh and took me to a room on the top floor of a guesthouse. He went out and came back with a fruit shake for me, which I drank. Then I felt very sleepy. For part of the time I lost consciousness, and when I was awake I felt too drowsy to focus properly. I was awake enough to know the man was raping me, though."

After a few days, the man drove Neang back to the restaurant. There, another customer promised her a job in a clothing factory in Phnom Penh. Such jobs, supplying high-street chainstores across Europe and north America, are well-paid and highly prized - Neang agreed. "I was taken to an area where I could see lots of girls all wearing nice clothes. I said to one of them: 'Where's the garment factory?' She replied: 'This is a factory, but it's not for clothes.' She told me that I had been sold to a brothel."

When Neang refused customers, men she describes as "gangsters" who policed the brothel beat her with electric flex. "The brothel owner told me I had to receive 10 customers a day. He injected me with a white powder, which he mixed with water. I don't know what it was, but it made me feel happier and more willing to receive customers."

It was probably methamphetamine, a drug whose use has exploded in Cambodia in the past few years. Neang, the youngest in the brothel, still resisted and eventually she was sold on to another brothel. Here she was expected to service 30 customers a day. Her punishment for refusing customers was food deprivation. By now she was addicted to the drugs she had been injected with. "The drug made my body no longer feel part of me. It blocked everything out. I didn't think of my sister or my mother or anything."

Three times Neang tried to escape and three times the brothel gangsters caught her. After two years she was rescued during a police raid and was placed in a shelter. There she came off drugs, with difficulty, and was referred to Neavear Thmey, a trauma recovery project run by World Vision.

For Neang, stepping through the high gates, which shield the girls from prying outsiders, was like entering a new world. From the swings and climbing frames to the pretty garden and murals on the walls, the centre - where girls spend between six months and a year - is intended to embody the innocence of childhood. The girls sleep in small groups, each with a house parent, in an environment as much like family life as possible. The centre has taken in girls as young as six. All arrive at the shelter malnourished, and 12% are infected with HIV.

"The girls sometimes cut themselves and we have to put netting on the roof to prevent them from attempting suicide by jumping off," says Sovandara Somchan, manager of Neaver Thmey. Learning a skill is a priority. Girls may also be given a cow to take back to their families to allow them to become self-sufficient, or a bicycle so that they can attend school.

Neang was given an HIV test at the centre. "When I heard the test was positive, I wanted to go out on to the road, get hit by a car and die," she says. Now she is beginning to come to terms with her diagnosis and hopes that, in due course, she will be eligible for one of the free places for anti-retroviral treatment offered by the government. She has been reunited with her mother and is back in her village, gathering firewood again. "My mother was so happy to see me. We were hugging and kissing and crying. After my sister and I disappeared, my mother consulted a fortune-teller, who told her I was dead. She says that having me back is like having her daughter reborn." Neang's future is uncertain, but at least for now she feels safe. She has no idea what happened to her sister.

Back at one of the bars not far from Sisowath Quay, the tourists are at play. As usual, there are three times as many Cambodian and Vietnamese sex workers as white, male visitors, and plentiful beer and football games on a big screen close by. For ordinary Cambodian women, it would be dishonourable to set foot in one of these places; for Cambodian men, it would be culturally alien and very expensive. Many of the girls for sale look no more than 15.

Bob, a thin, white-haired American man in his 60s, says that he is self-employed and spends part of the year in the US and part here. Like many of the men in the bars, he is a regular. He tells me proudly that he has "had" half the girls at the bar and that, while some men end up paying $10 for them, he can get them for as little as $5. "All the men at this bar are here for one reason and one reason only." He winks. "Most of the girls are doing this for their families. They send a lot of the money they earn home."

Does it bother him that so many of the girls look no more than 15? "Well, they're supposed to be 18 to work here, but who knows?" he says, shrugging.

At another bar, a large group of Scottish men in their 40s and 50s stand laughing and playing pool. One by one they pair off with the girls who approach them. An American man shakes my hand. He, too, is happy to explain how things work. While he chats, the Vietnamese girl he has selected to spend the night with sits patiently on her bar stool, a smile soldered to her face. He is a regular visitor. His business on the US east coast is seasonal and in winter he heads for the 90 degree-plus (32C) temperatures of Cambodia. He is travelling with a friend who is wealthy enough to take a couple of months off for an annual visit to Cambodia. The pair visit brothels together. He makes a moral distinction between himself and his preference for "a mature woman who understands what sex is all about" and his fellow tourists who seek out eight- and nine-year-old children. "Those guys who come here for the girls and boys of that age should be taken out and shot."

Christian Guth, a former French senior police officer, now an adviser to the ministry of interior in Cambodia, believes there has been an improvement - the government is doing more than it once did to clamp down on foreign abusers. "Five years ago, the police laughed when we expressed concern about men having sex with 14-year-old girls, because it was something they did themselves. The first obstacle to change was their mindset. We haven't got 100% commitment, but we have identified a few officers in each area of the country who are really committed." In 2002 an anti-human trafficking and juvenile protection department was established.

It is, however, hard to find evidence of a crackdown. The number of arrests of men for sexually abusing children was 401 last year, but only 18 of them were foreigners. The men come from a variety of European countries, from New Zealand, Australia, North America and Japan. The youngest was 28, the oldest 69. Many are professionals, including two retired military officers, several teachers of English in Cambodia and a chemistry professor. The ages of the children abused range from seven to 15. The vast majority of charges are dropped even when the men are caught in a sex act with a child. There are currently fewer than half a dozen convicted foreign paedophiles in Cambodian jails, while three US citizens have been extradited to their own country to stand trial. A handful of other men are in jail in their own countries, including two in the UK.

Guth acknowledges the pervasive corruption. "A lawyer might say to the family of a child who lodges a complaint against a paedophile that if they drop the complaint, the offender will give them anything from a few hundred dollars to $2,000." He wants to be optimistic, but admits that the number of sexually exploited children is increasing. Not only are there more tourists, there's also a new category of Khmer middle-class man who now has the money to pay for sex. Another problem is that the government seems less determined to stamp out child prostitution than the NGOs are. "The penalties here are much less harsh than in Thailand, and the sex is less expensive."

Some girls who were forced into prostitution do manage to put the rapes and beatings behind them and start a new life. Sovandara Somchan proudly points to photographs on his office wall of girls who have launched successful careers as hairdressers or seamstresses after a period at Neavear Thmey.

Pov, 17, hoped that she, too, could make a new start. She was tricked into a brothel at the age of 14 while selling lotus flowers on the riverfront in Phnom Penh. Like Neang, she was distraught when she became sick and diagnosed with HIV. "I knew that somehow I had to run away," she says. She succeeded by climbing out of a window and running to the local market. A porridge-seller helped her hide and gave her money to get a bus home to her mother.

Pov's priority now, as it was before she went into the brothel, is to earn enough to eat for whatever time she has left to live. "Because I have Aids, getting married and having children is no longer an option for me." She has, she says, one simple dream. "If I knew I had just one week left to live, what I'd like to do most of all is go into town and buy all the fruits I adore and eat them - fruits like apples, which don't grow on the trees in my village."

Some names have been changed.