Health officials are urgently investigating the rise in cases which has led to more than 100 children needing hospital care and liver transplants for 10 British children.
Since the start of the year, 111 children have required hospital care for liver inflammation (hepatitis), with the majority of cases occurring among children under the age of five.
The leading line of inquiry is that the cases are being fuelled by a common virus called the adenovirus.
This virus usually causes mild illnesses including stomach upsets and colds.
But one theory is that the virus is leading to more severe illness among some children due to "susceptibility, for example due to lack of prior exposure during the pandemic", according to a technical briefing from the UK Health Security Agency (UKHSA).
Of 53 cases tested, 40 (75%) showed signs of adenovirus infection.
Routine NHS and laboratory data show that common viruses circulating in children are currently higher than in previous years and there is a marked increase of adenovirus, particular in the one to four age group, the UKHSA said.
Other avenues being explored include whether a prior Covid infection followed by an adenovirus infection could be leading to more severe cases or co-infection with the two viruses.
Experts are also examining other possible causes including a new variant of adenovirus; potential exposure to drugs, toxins or environmental factors; a new type of infection; or a new variant of the virus which causes Covid.
Covid-19 vaccination is not a contributing factor as none of the cases investigated so far have been vaccinated.
Of the confirmed cases, 81 live in England, 14 are in Scotland, 11 are in Wales and five are in Northern Ireland.
The cases are predominantly in children under five who showed initial symptoms of diarrhoea and nausea followed by jaundice.
Parents have been urged to be alert to the signs and symptoms of hepatitis, including jaundice.
Dr Meera Chand, director of clinical and emerging infections at UKHSA, said: "Information gathered through our investigations increasingly suggests that this rise in sudden onset hepatitis in children is linked to adenovirus infection. However, we are thoroughly investigating other potential causes.
"Parents and guardians should be alert to the signs of hepatitis, including jaundice, and to contact a healthcare professional if they are concerned. Normal hygiene measures such as thorough hand washing, including supervising children, and good thorough respiratory hygiene help to reduce the spread of many common infections, including adenovirus.
"Children experiencing symptoms of a gastrointestinal infection including vomiting and diarrhoea should stay at home and not return to school or nursery until 48 hours after the symptoms have stopped."
According to the World Health Organisation (WHO), as of April 21, 169 cases of acute hepatitis of unknown origin have been reported from 11 countries in Europe and America, while one person has died.
The global cases involve people aged one month to 16 years old, and 17 children (approximately 10%) have required liver transplants.