An excellent post, and interesting discussion, over at David North's Digital Rant on, in light of the Byron report and plenty of stories in the media, whether or not the government should regulate social networks, and if such regulation is even possible. My own feeling is that any regulation probably wouldn't work, because the web moves too fast, and probably wouldn't solve long-standing problems or fears about the number of children using social network sites.
[Although you could also argue that as these kids have been using the internet all their lives, they're probably a hell of a lot more switched on and web-literate than most of us adults.]
If any social network wants to get a bit of good PR, they should develop/announce new privacy controls, get a bit of positive press, and chances are the media will move on elsewhere if they think the issue's being sorted, and the government may well forget about it, and find something else equally evil to turn their sites upon.
Quite what privacy controls or codes or conduct or whatever else they could put it place is a moot point. In the comments, I suggested that a privacy tour that explains exactly how privacy settings work and how you can protect yourself and your personal details might be the best interim solution.
David also muses that firstly, parents should take more responsibility, and also that if social networks started from a point of locked down info, that might be another solution. Although he also concedes it would give a greater learning curve so could discourage new users.
One thing is clear: the fact that not even those who work with or around the sites on a regular basis can see an immediate solution means those who don't (ie Gordon and other politicians)  shouldn't rush in with ill-thought through and knee-jerk regulation and legislation.
I won't hold my breath.
 Perhaps they should put the person who runs 10 Downing Street's Twitter and Flickr feeds in charge of web strategy. At least it's somebody who a) knows how to use a Web 2.0 service and b) Seems to understand how Web 2.0 works.
Breath still not being held.