Ministers say agreements reached with internet firms will lead to a "fundamental change" in how images of child abuse are dealt with online.
Firms such as Google, Microsoft and Twitter were summoned to a meeting in Whitehall amid calls for them to do more to remove illegal material.
They have agreed to give the Internet Watch Foundation more powers and resources to search out abusive images.
Prime Minister David Cameron said "important steps" had been taken.
But Labour said the outcome was a "damp squib".
Internet service providers in the UK have been at the centre of the debate about online images showing the sexual abuse of children following two high-profile court cases in which offenders were known to have sought child pornography online.
Mark Bridger, sentenced to life in May for the murder of five-year-old April Jones in Machynlleth, Powys, searched for child abuse and rape images.
And police who searched the Croydon home of Stuart Hazell, jailed for life in May for murdering 12-year-old Tia Sharp, said they had found "extensive" pornography featuring young girls.
The prime minister has pledged to "put the heat on" companies to make removing obscene material and blocking access to indecent images more of a priority, saying he is not "satisfied" that enough is being done.
The meeting, chaired by Culture Secretary Maria Miller, was attended by Yahoo!, Google, Microsoft, Twitter, Facebook, BT, Sky, Virgin Media, TalkTalk, Vodafone, O2, EE and Three.
The government said the companies had agreed to allow the Internet Watch Foundation to proactively search out abusive images, rather than just acting upon reports it receives, and to give it an extra to boost its capabilities.
At the moment, it is estimated that there are one million unique images of child abuse online, yet only 40,000 reports are made to the industry-funded body each year.
Culture Secretary Maria Miller said the public expected that everything possible was being done to remove "absolutely abhorrent" material - including images of child abuse - from the web.
"What has been agreed today is a fundamental change in the way the industry will approach child abuse images and removing them from public view," she told BBC Radio 4's The World at One programme.
"It does mean that more of those images can be removed too."
Mrs Miller also said the use of splash pages, warning people they may come into contact with indecent and illegal content, would become universal by the end of the month and the government would work with industry to tackle the distribution of obscene images by e-mail and other channels.
Speaking at the G8 summit in Northern Ireland, Mr Cameron said he was "personally committed" to securing action and urged firms to "use their expertise, their brains and their brilliance to get these disgusting images off the internet".
He also said he would be happy to meet the parents of April Jones to discuss what was being done.
The UK's four largest internet service providers - BT, Sky, TalkTalk and Virgin Media - said they had a "zero tolerance" approach to child abuse material online and would work with the Internet Watch Foundation to increase its effectiveness as well as taking further steps themselves to help parents protect their children.
"The ISPs are already the largest funders of the Internet Watch Foundation (IWF) making it the most effective hotline in the world at removing child sexual abuse content, and one of the best funded," they said in a statement.
"The ISPs also already work closely with the Child Exploitation and Online Protection Centre (CEOP) to support its work in eradicating the sexual abuse of children, particularly in relation to online activity," they added.
BT said recently that any of its customers attempting to access web pages on the Internet Watch Foundation's list of identified images of child sexual abuse would now see a message telling them that the site was blocked and the reason why.
Under the previous system, the site is blocked, but internet users only see an "Error 404" message.
A 2011 review by Mothers' Union chief executive Reg Bailey concluded children were being bombarded by sexual images on the internet, television, videos and in advertising and it should be much easier for parents to block under-age access online.
Leading internet firms have said they will continue to promote the use of "family friendly parental controls" but have rejected calls for default filters for pornographic content to be introduced from next year - arguing they can be "circumvented".
Mr Bailey said no filters could be wholly effective and he said they risked giving parents a false sense of security and stopping them from talking to their children about the "dangers they encounter in the virtual world".
Labour said the funding pledge for the IWF, spread over four years, was "woeful" and filters would not be available to all parents until 2018 at the earliest.
"We need proper measures to stop people viewing child abuse hiding in anonymity," said shadow culture minister Helen Goodman. "This shows the Tory-led government is weak in standing up to powerful companies even when the safety of children is at stake."