Children are being trafficked into the UK from Africa and used for human sacrifices, a confidential report for the Metropolitan Police suggests.
Children are being beaten and even murdered after being labelled as witches by pastors, the report leaked to BBC Radio 4's Today programme said.
Police face a "wall of silence" in investigations because of fear and mistrust among the groups involved.
It follows the case of a girl who was accused of witchcraft by her guardians.
Three people, including the girl's aunt, were convicted of trying to "beat the devil out of" the un-named 10-year-old - originally from Angola.
The report was commissioned by the Met after the death of Victoria Climbie in February 2000 and because of concerns over so-called faith crimes.
The 10-month probe was also intended to be part of efforts to "open a dialogue" with Asian and African communities to prevent child abuse in the London boroughs of Hackney and Newham.
Information was gathered with the help of social workers, human rights lawyers and race relations experts from within these ethnic minority groups.
Today programme reporter Angus Stickler, who obtained the police report due to be published later this month, described it as "absolutely chilling".
"The most gruesome details come from the African communities," he said.
"This report talks of rituals, of witchcraft, being practised in churches in London. It is described as big business."