A Scout leader, a retired teacher and members of the Armed Services were among 76 people arrested in raids as part of an operation targeting suspected internet paedophiles.
Officers from more than 40 police forces executed more than 141 search warrants in the 48-hour operation led by the Child Exploitation and Online Protection Centre (Ceop).
West Midlands Police are believed to have made 35 arrests in areas such as Birmingham, Solihull and Wolverhampton. One offender was found with 2.5 million still and moving images.
Some 80 children were "safeguarded" following the raids. One in four were found at the properties searched by police.
Known offenders who had breached the conditions of the Sex Offender's Register were also arrested.
Ceop's report, entitled "A Picture of Abuse", was released as part of the operation targeting paedophiles. It studied almost 100 case studies from 34 forces. It found offenders who both possessed child abuse images and attacked children were "almost exclusively white males", most aged between 19 and 45."
The report said that one analysis showed 55% of paedophiles who possess indecent images also commit sexual offences against children, however Andy Baker, deputy chief executive of the CEOP Centre said though many of them had been found with "an exceptional number of images" it did not necessarily mean that that person will go on to commit "contact offences."
Kate Fisher, a principal analyst at Ceop, said: "The images being downloaded are increasingly becoming more extreme, sadistic and violent and feature increasingly younger children."
Ceop called for the authorities to look beyond the quantity and severity of the images, adding that a full risk assessment should be considered before a judge hands down any sentence.
Ms Fisher said the dramatic increase in images being downloaded, and the cuts to police resources, meant officers struggled with the workload but stressed that the notion that any case may result in the identification of a victim should be at the forefront of every investigation.
She added: "The levels of austerity and the caseload of indecent images of children is unprecedented. A quick and timely investigation for each case is increasingly unrealistic. Victim identification is the key element."
In 85% of cases, offenders looking at indecent images of children did so at home, with the rest looking at images mainly at work.
The majority lived with a spouse or partner and of that group, more than half were living with children.
From the 97 offenders in the study, 246 victims of contact abuse were identified.
Referrals to Ceop increased by 181% between April last year and March, figures showed.
A 43-year-old man from Bexhill, East Sussex, was arrested by officers from the Paedophile On-Line Investigation Team (POLIT) of Sussex Police yesterday on suspicion of distribution of indecent images of children.
Officers seized computer equipment from his home and the man was later released on conditional bail until December 12 while inquiries continue, including forensic examination of computer material, a Sussex Police spokesman said.
The Sussex officers were supported by officers from the Serious Organised Crime Agency (SOCA), who are investigating intelligence that indecent images of children have been exchanged through email with people in the United States, he said.
The spokesman said there were no allegations of any actual contact offending at this time, although the computer material is yet to be fully examined. He added that there was no evidence to suggest that any of the images were of local children.
The Sussex POLIT, which was established in July 2008, acts as the specific point of contact for all suspected paedophile online offences in the county.
Detective Superintendent Nev Kemp said: "This area of policing is particularly difficult not only due to the nature of the images officers have to view, but also to the devious electronic methods the criminals use to try to conceal their offending across the web."
"We have viewed and removed from circulation millions of images, all deeply offensive and insulting to children, and many of them of the most sickening type."
Ceop's report said it was "increasingly unachievable" for officers to investigate such cases.
It warned: "There is a clear correlation between IIOC offending and contact sexual offending against children although causation cannot be established.
"Anyone who possesses IIOC poses a risk of committing contact sexual offences against children.
Access to children was a "key factor in the assessment of an offender's risk" and the link between possessing the images and carrying out sexual attacks "highlights the need to consider each possession offender as a potential contact offender to some extent", the Ceop report found.
The findings come after a watchdog claimed that serious child abuse was rife across England, saying that girls as young as 11 "expect" to have to perform sex acts on rows of boys for up to two hours at a time in parts of London.
Deputy children's commissioner Sue Berelowitz told MPs her in-depth study of the problem suggested there "isn't a town, village or hamlet in which children are not being sexually exploited".
Jon Brown, head of the NSPCC's sexual abuse programme, said: "We must never forget that these images are abuse in themselves and often very young children, including babies, are being assaulted and raped so these pictures can be produced."