Police referred 28% fewer child abuse cases to prosecutors last year than in 2010/11, prompting Labour to accuse the Government of "hollowing out" the police and the criminal justice system.
Shadow home secretary Yvette Cooper described the the drop in the number of child abuse cases referred to the Crown Prosecution Service, which decides whether to charge alleged offenders, as "appalling".
She criticised Home Secretary Theresa May for "hollowing out" the police service and letting child abuse victims down.
Crime prevention minister Norman Baker said he was "concerned" at the drop in referrals and would be raising the matter with the new Director of Public Prosecutions Alison Saunders.
Ms Cooper said the figures were part of a pattern as referrals for domestic violence, rape and other sexual offences were also going down at a time when reports have been rising.
Labour's figures, which take in CPS statistics released in a parliamentary answer to the Opposition's Home Affairs team, also showed that in 2012/13, a sexual offence against a child was 24% less likely to be passed to prosecutors.
The drop-off in CPS referrals came during a time period when reported child sexual offences rose from 17,730 in 2010/11 to 18,915 last year.
Despite this, only 9,381 cases were referred by police to the CPS last year, compared to 13,018 in 2010/11.
Ms Cooper said: "These figures are extremely shocking and deeply disturbing."
"This is an appalling drop of nearly a third in the number of child abuse cases that the police are referring for prosecution, even though more cases are coming forward. It shows the disgraceful way the police have been hollowed out by Theresa May, with so many specialist child protection units also being cut, letting victims down and letting abusers off.
"Children who are victims of sexual abuse show remarkable courage to come forward and they should have the confidence that when they report abuse everything possible will be done to prosecute abusers. These are some of the most devastating crimes of all which can destroy people's lives.
"Instead since 2010 a hollowed out criminal justice system is letting an increasing number of these victims down and that means more dangerous sex offenders are evading justice too.
"These crimes have been swept under the carpet for too long. Yet just as the criminal justice system was starting to get better at investigating and prosecuting, the clock has been turned back."
Mr Baker said that he was leading a national group to ensure all agencies, including the CPS, worked together to identify those at risk of child sexual abuse and that police, health and children's services focused on the needs of the victims.
"Child abuse is a particularly abhorrent crime. The Government has set out measures to prioritise action to prevent abuse happening in the first place, both on and off line," he said.
"We are also working to target the organised crime groups that perpetrate systematic abuse with the new National Crime Agency bringing specialist skills, resources, stronger tasking arrangements and international reach."