An alert was raised after about 100 red bin liners full of asbestos were found at seven sites around the city, including Perry Common, where the children were seen ripping open the bags and throwing it over each other on Sunday afternoon.
Contact with blue asbestos and inhaling its fibres are linked to cancer and lung diseases. Some of the bags found were split open.
Fire crews and environmental health officers wearing protective clothing sealed off all the sites yesterday and contained the asbestos to prevent dust being released.
But concern remained about the children seen playing on the waste ground. Gavin Tringham, head Birmingham City Council's environmental protection unit, appealed for their parents to come forward.
"They were tearing the bags open and throwing it over each other," he said. "We urgently need to get hold of them."
As well as Perry Common, the bags were found at four sites in Erdington, one in Aston and one on the Ravenside Industrial Estate. Police said it appeared that the dumpers had used a flat-bed lorry to dispose of them.