VULNERABLE youngsters are placed at risk of abuse in children's homes because of lack of money, the Edinburgh child protection inquiry was told yesterday.

Children's rights officer Linda McCracken said shortage of resources led to inappropriate referrals and subsequent sexual abuse, bullying and physical assault.

''What brought it home to me was a girl who had been harassed and was getting approaches from a young man in the unit,'' she said.

''She had gone to staff and the final occasion was when he cracked her on the head with a coffee cup and she had to get staples in her head. She said if it was at home, we would have done something about it sooner.''

Ms McCracken said difficulties arose with children of primary school age who had suffered abuse at home and were liable to sexually abuse other youngsters. Foster parents were reluctant to take them and local authorities had to find somewhere for them.

''What happens, and I think it is resource-led, is when the (social service) department is trying to offer something and they know it is not the best thing for that child. There are risks, certainly with younger children,'' she said.

Ms McCracken said problems also arose later in teenage years when youngsters were developing their own sexuality and the mix of children was wrong in particular units.

The inquiry, chaired by Professor Kathleen Marshall of Glasgow University, is seeking to establish what lessons need to be learned after the jailing of two care assistants last December for a total of 27 years for abusing children in Lothian children's homes over two decades.

Earlier, the inquiry was told that complaints by children against other youngsters in residential homes far outnumbered complaints against staff.

Last year, there were nine complaints relating to emotional, physical and sexual abuse against children in Edinburgh homes compared to three against staff.

Ms McCracken, who is employed by Edinburgh, Midlothian and East Lothian councils to act on behalf of young people in care, said it was logistically impossible for her to attend to all the children in care but there was support from staff and other agencies.

Nevertheless, she said there were a number of improvements that could be made within existing resources. Greater devolution of budgets would allow individual homes to arrange their furnishings and minor repairs. ''A broken lock in a bathroom is not a high priority but it is for young people who want to have a shower,'' she said. ''We all have to work towards creating a different culture where people can feel able to share concerns, both children and members of staff.

''Historically, residential care workers have felt they were the poor relations within social work. That is where something could be done to give them greater status and recognition,'' Ms McCracken added.

The inquiry continues.