Children need to know and understand how to properly approach dogs and interact with them. They don't know by default, and most kids really want to play with dogs (some don't, but I have found this is usually caused by some underlying fear). It is the job of the parent and the job of the dog owner together to teach the kids how to behave around the dogs. They (and the adults too) should also understand that because the kids are at eye level, the dog sees them differently.
Think about this for a minute ... how does your dog react when you squat down and look him directly in they eye? Does he calmly gaze confidently back at you? Does he sit (or equivalent default behaviour)? Does he get upset and challenge you? Give it a try and you will find that what your dog does while you are in this position will likely give you an idea how he will respond to children - or better yet, have an adult stranger do it.
Mine sit when confronted like this, but that is because it is what we've taught them to do. Why not squat down to his level (or better yet, lie down on the floor) and give him a few obedience commands?? How did he do? If you try this, let me know how it goes!! I'd love to hear it. I find even the best Agility, Schutzhund or RallyO dogs find it difficult to follow commands when the handler is on the floor if the dogs aren't raised with children.
True, some dogs will slip more easily into a friendly relationship with kids - but for how long? Kids run, scream, play, throw things, crawl on the floor, play dress up ... and many other things. These may be actions or sounds your dog is not used to.
What do we do with ours and our fosters? Well, we spend some time working with each dog while acting like children and generally being silly. Then we teach them the proper response to these actions. Of course, there are TONS of cookies involved in this part of the training!! Once we have their response down to what we want, we bring in kids to do the same thing. If there is an instance where the kids do something and the dog doesn't know the proper reaction, than they are taught it at that point (but usually a default behaviour comes out when they don't know what to do like this provided you've done enough foundation training). That being said, the dogs and children are never left unsupervised - if we need to leave the room for any reason, the dog comes too.
If your dog has not been trained how to deal with children, how will he know what is and is not appropriate behaviour?
Don't forget that your dog will need quiet time between "doses" of kids. The more used to kids they become, the longer you will be able to have them interact. It is like any other training session and unless you've worked your dog through them, he won't be able to enjoy the freedom he deserves.