No one could possibly pretend that paedophiles using internet chat rooms, email, IRC and so on to contact and "groom" children isn't a problem. Of course it is. But what should be done about it?

Surely it should be possible for the internet industry and the government to come up with a practical solution between them and fix the problem. It is not that nothing is being done. The Home Office has a task force on child protection on the internet, one of whose aims is to make the UK "the best and safest place in the world for children to use the internet".

And earlier this year, the government committed £1m to an advertising campaign to warn children of the dangers of the internet, but it is not obvious that such initiatives are helping as much as might have been hoped.

Chat rooms are useful, interesting and fun: turning them off (or, in fact, driving them underground) does not solve the problem. Banning them is pointless and counterproductive, penalising the majority of responsible users (eg, my wife and me) while making them even more attractive to those at risk (eg, teenagers). The problem isn't the chat rooms, but that no one knows who is in them: it is a problem of identity.

We are never going to get anywhere by applying existing concepts to the virtual world: the "internet passport" or "web driving licence" isn't the way forward.

This is because proving your identity in the real world generally means proving who you are. But in the chat room, the problem is what you are: are you an adult, child, UK subject, Manchester City fan or a single parent?

Any system that demands to know who you are in this environment makes the problem worse, not better, because it means that even more people will know your real identity. Suppose, however, that children were given a digital ID (think of it as some kind of certificate stored on a smart card) by their school, or their parents' bank or some other trustworthy body. Now suppose the digital ID contained a few unforgeable credentials ("I am between 14 and 18", "I am male", "I am resident in the UK") but that the children could choose any name they wanted for the ID ("I am David Beckham").

This gives us the best of both worlds: the kids can log on to appropriate chat rooms, but no one else in the chat rooms (nor the chat room operators) will know who they really are. As I have pointed out here before, this kind of implementation of virtual identity allows people to partition their online identities: much as we now have a few credit and debit cards in our wallets, we ought to have a few digital IDs. I might log on to the bank as myself, to a chat room as The Terminator and NHS Direct as John Doe.

Now that Microsoft has decided to withdraw some of its MSN chat rooms, the right question to ask is not "Where do you want to go today?" but "Who do you want to be today?"

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