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After months of negotiations, Facebook has reached an agreement with the U.K’s Child Exploitation and Online Protection Centre that will result in a new safety application aimed at British 13-18 year olds.

CEOP, the UK government’s police agency responsible for protecting children against sexual exploitation, had been pressuring Facebook to install what many in the media called a “panic button” on every page for young people to report online crimes including sexual behavior and grooming.

The solution has nothing to do with “panic.” It’s about providing young people in the UK with the option of accessing a resource that provides internet safety messaging and links to places where they can report a variety of different abuses including cyberbullying, hacking, mobile problems, harmful content and “sexual behavior grooming.”

The big difference between the solution and what was first proposed by CEOP is that the “button” is optional. It’s really an application that helps CEOP build its brand on Facebook.

Facebook will donate advertising to promote the application but will not install it by default and will not place the so-called “panic button (actually a link to CEOP’s Advice, Help and Report Center) on each page.

The police agency and Facebook had been engaged in a very public dispute over the button. In April, CEOP’s CEO Jim Gamble told me that he felt the button would act as a deterrent to would-be predators, letting them know that Facebook was working with law enforcement to protect children. Facebook was concerned that the button could create as false sense of insecurity, making it appear that the problem is greater than it actually is. Facebook was also unwilling to turn over its abuse reporting process to a government agency, arguing that it was in a better position to police its own service.

The agreement does provide CEOP with a presence on Facebook, but Facebook will continue to operate its own reporting system. And, rather than a mandatory “panic button” on each page, it’s now an application that young people can install if they care to.

Facebook helped CEOP create the application and is donating advertising to promote the application, including an ad that will appear on the home page of every UK Facebook member under 18 along with ongoing advertising.

Except for Facebook’s donation of the advertising space, it’s like any other brand campaign. CEOP still has to promote its brand and its messaging on the service. “It’s up to CEOP to use Facebook to promote its brand,” said UK Facebook spokesperson Sophy Silver. “This is a different way to use Facebook than they initially anticipated but we’re convinced that with the viral nature of the social graph on Facebook that this will be a good solution for them.”

CEOP now has a Facebook page from which UK youth can install the CEOP application to their home page.

Stranded by the Icelandic volcano, I spent nearly a week in London in April talking with officials from both Facebook and CEOP.  That included a visit to CEOP’s London headquarters where I met several staff members who are doing an impressive job helping to protect British youth from all sorts of sexual abuse on and off the Internet. I was especially impressed by the agency’s educational outreach program and is work with non-profit organizations and social services.  Even though CEOP is a law enforcement agency, it understands that you can’t  arrest your way out of child endangerment.  The agency has an educational program that reaches out to schools across the country.

(Disclosure: Facebook provides financial support to ConnectSafely.org, a non-profit Internet safety organization where I serve as co-director)