The attacker - described as 'a typical blond-haired, blue-eyed little boy' - was let off with a caution by the Crown Prosecution Service after the incident last October.
Just weeks before the attack the law was changed to make it possible for children aged 10 and over to be prosecuted for rape.
Yesterday, the victim's 30-year- old mother claimed the boy now rides his bike outside their Derbyshire home - leaving them with a constant reminder of what happened.
The attack took place when the girl, now four, was left for the night at the boy's home. His mother, a family friend, put the children in the same bed.
The girl's mother, who cannot be named because her child must not be identified, said: 'The police say there is nothing we can do to stop him. She is virtually a prisoner in her own home. I will not let her out, because I do not want her to see him when he plays outside her house.
'He is still playing with other little girls and is capable of doing that again, and no one knows what he has done.'
The boy, now 11, admitted having unlawful sexual intercourse to police and was given a formal caution in March after police sent a file to the CPS.
A Derbyshire police spokeswoman said the CPS took the final decision not to prosecute and added: 'There is no way it would ever go to court with a child that young. She would not be able to give evidence, and, considering the ages of both of them, it was considered that a caution was the way to go.'