Police are appealing for public assistance following reports two children were approached by an unknown man at Thirlmere, near Picton.
About 3.15pm on Friday, a 12-year-old boy and 8-year-old girl were walking home from school along Carlton Road.
The boy has told police a man driving a grey-coloured hatchback followed the girl, as she was walking a short distance behind him.
When he called out to the girl, the man drove off from the location.
Officers attached to Camden Local Area Command were alerted and launched an investigation.
Police would now like to speak to a man, who they believe may be able to assist with their inquiries.
He is described as being about 60 years of age with a long black and grey beard.