What you DON'T want to do is punish him for barking at the kids. He needs a way to tell them "Back off. I'm scared and I may get ugly". Punishing a dog for barking because he's afraid leads to a dog who bites with no warning.
I also would not recommend our natural inclination to pick them up and hold them while introducing him to kids. There is no way for him to back away when he's held and he will be more likely snap.
What I would do is carry treats in my pocket when you might encounter kids. Use older kids first who are more capable of following your directions. Ask them if they would help you train your dog. Most kids will jump at the opportunity. Have them first just drop treats for him. If he's comfortable going to get the treats, let them hold out a treat in their palms. When you first go to this stage, ask the kids to please not pet him. That would be pushing him too far. To make the explanation easier you can just say, "He's in training. He's not supposed to be petted by strangers right now".
When - and only when - he acts totally carefree about going to get treats from an unknown kid, you can then let them try giving a treat and petting.
Take your time and go slow with this. He needs to build up ALOT of positive associations with children.
__________________  FirstYorkie
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