The Metropolitan Police are investigating a claim a now-disbanded undercover unit created aliases using the identities of dead children.
The Guardian newspaper reported that the Special Demonstration Squad stole the identities of about 80 children who had died at an early age.
It is believed the claims relate mainly to operations in the 1980s.
The Met said the alleged practice was not something that would be currently authorised by Scotland Yard.
According to the Guardian report, deceased children's identities were used by the undercover officers because they would stand up to scrutiny if birth records were checked.
The practice was authorised by the force and carried out without consultation with the parents of the children, the report suggested.
Two former officers of the Special Demonstration Squad (SDS) are quoted as saying they were issued with identity records, like driving licences and national insurance documents, in the children's names.
A document seen by the newspaper reportedly indicated that such identities had been used by officers between 1968 and 1994.
The SDS was a unit whose officers were involved in infiltrating protest groups. It was disbanded in 2008, according to the Guardian.
A Met statement said: "A formal complaint has been received which is being investigated by the DPS (Directorate of Professional Standards) and we appreciate the concerns that have been raised."