The regulator of healthcare products has said the drug increased the risk of children having suicidal thoughts and was not effective in treating their depression.
The announcement today is based on nine research reports one of which the Keller study highlighted problems with Seroxat as early as 1991.
About 8000 children are thought to be on Seroxat - they should now seek advice from their doctor.
In the end it was nine studies based on data from more than 1,000 children that persuaded the Government that Seroxat should no longer be prescribed to anybody under the age of 18.
The patient information sheet was changed two-years ago to warn about the risk of suicidal feelings in the first few weeks of taking Seroxat, but that was for adults.
Seroxat was never licensed for children although doctors have been happy to prescribe it. Last year alone, 40,000 prescriptions were written out for up to 8,000 children and adolescents.
There are now serious questions to be answered over how long the manufacturer of Seroxat, GlaxoSmithKline, had evidence that there were concerns about the drug. And whether the Department of Health's licensing body was aware that data was available on a possible link between suicidal thoughts and adolescents taking the drug.
SEROXAT - was there delay?
GlaxoSmithKline had all the data by the end of last year.
But it didn't pass the information on to the Government's Medicines and Healthcare products Regulatory Agency until the 27th of May.
It was in turn looked at by the Committee on Safety of Medicines and a new expert working group set up to investigate drugs in the SSRI group, which includes Seroxat and Prozac.
Seroxat is one of GlaxoSmithKline's best-selling drugs and they maintain that it is safe for adults. But in children the combined data showed that the risk of suicidal thoughts and self-harm was two to three times greater on the drug than on a placebo.
All doctors were informed this morning of the decision. But a safety warning was also issued that it is dangerous to suddenly stop taking the drug - people must reduce their doses slowly.
Today's announcement will only add to disquiet over these types of anti-depressants. Last week, Professor Alastair Hay persuaded a coroner to hear evidence into whether Prozac had caused his wife Wendy to hang herself. In the end he said it may or may not have caused her to take her life.
The new review into SSRIs will look specifically at suicide rates and withdrawal side-effects. Companies, including GlaxoSmithKline are also to be inspected to ensure they have proper systems for evaluating data and that they are not suppressing evidence.