, published yesterday, has been praised by the Advertising Association as "balanced and measured".
The Department of Children, Schools and Families gave the report panel a remit to gather and evaluate evidence about children's commercial engagement, the impact of this on their wellbeing, and the views of parents and children.
The panel concluded that the evidence of harm and of benefits caused by the commercial world is "rarely conclusive".
"Overall, it suggests that children are neither the helpless victims imagined by some campaigns nor the autonomous 'savvy' consumers celebrated by some marketing people," the report said.
But it raised specific concerns including "potential deception and threats to privacy" as a result of new media marketing techniques, as well as the increasing use of schools and public spaces as marketing venues.
Ed Balls, the schools secretary, said yesterday that media literacy could be placed on the national curriculum.
The report is supportive of the idea of more media literacy eduction but qualifies it with comments such as: "Children (like adults) may know in principle that advertising intends to persuade, but they may not necessarily mobilise this kind of knowledge in specific real-world situations, or use it as a guide to consumer behaviour more generally."
run by ad industry-funded body Media Smart, which describes itself as a non-profit media literacy programme for primary schoolchildren aged six to 11.
The initiative, called Digital Adwise, plans to distribute teaching materials to 60% - or 15,000 - of the UK's primary schools by 2011.
It was launched by the minister for creative industries, Sion Simon. "Digital Adwise is cutting edge," he said. "In today's media environment, children need to be helped to think critically about the media, particularly in relation to the internet and advertising."
Media Smart's financial backers include Mars, Kellogg, the IPA, ISBA, the Advertising Association, MindShare and Viacom Brand Solutions.