Several major advertisers have frozen spending on YouTube after an investigation revealed their spots were running against videos featuring kids in states of undress and other situations that had drawn comments from paedophiles.

Brands including Adidas, Deutsche Bank, Mars, HP, Diageo, Cadbury and Lidl pulled ads from YouTube over the issue, according to a report in the Times of London.

That came after the newspaper discovered the marketers' ads had run in videos with young girls in underwear, doing the splits, and rolling around in bed - which included sexually inappropriate comments posted by viewers.

According to the report, the videos themselves appeared to be uploaded by kids with no intent to appeal to sexual predators.

In response to the report, YouTube said in a statement: "There shouldn't be any ads running on this content, and we are working urgently to fix this."

It comes not long after widespread reports of wildly inappropriate material showing up on the YouTube Kids app, featuring characters like Peppa Pig and Spider-Man engaging in violent and sexual acts. The controversy has been dubbed 'Elsagate' after the character from Disney's Frozen, who features in many of the strange clips.