The study, led by Professor Jonathan Grigg, shows that the lung capacity of 8- and 9-year-olds is five percent lower than the national average.
And seven percent of the kids have lung function reduced to a level internationally regarded as hazardous.
The particles are produced in vehicle exhaust and are far smaller than the width of a human hair.
After analysing the particles collected on roadside leaves, the study concluded that the pollution can be most intense at the height of many children.
"Now, if that's due to air pollution, as we suspect, they're going to be at increased risk from a range of respiratory disorders such as asthma and infection, and may be at risk in adulthood," he added.
"Our findings in the East End of London are that children living here have slightly lower lung function than what we'd expect from the national average," the BBC quoted Professor Grigg as saying.