This answer is too late for you, but maybe it helps someone else.
I would recommend a completely different strategy.
1. At the beginning don't let the children try to pet the dog
Every dog is different. And not every dog wants to be hugged or petted so much. Children are often loud, fast and chaotic and mostly have no understanding of personal space. They want to tell the dog that they love him and don't understand that maybe the dog does not like this kind of loving. So the main thing is to teach the children to respect the personal space of the dog. Maybe you can touch and pet your dog, because the dog trusts you. If he is afraid of a children, every physical contact will be uncomfortable for the dog. He will never like it, until he trust the children. So before the children are allowed to pet the dog, the dog has to learn to relax in the presence of the children.
2. Don't let the children touch the dogs area
or leaving something there. The dog is afraid of the children. And now he comes to his personal area, the place where he normally feels very safe, and he can smell, that the children were there. The dog thinks that the children want to take his personal area for their own purpose. They don't respect him. He is much more afraid than before.
3. Show the dog that the children give him the space he needs
You have to show the dog, that the children respect you and him. Let him see, that there is no need for being afraid. That means, if the children arrive at your house, they can say hello to the dog, but they are not allowed to approach him. They don't touch him. It is good, when the dog is in the same room, so he can watch you and the children. Create an area where he is "safe" and no children will go into this area, but where he can see you. Order the dog to lie down and then ignore the dog and live your life with the children. Play and talk with them.
4. Show him, that walking with children is fine
After a while (it can take minutes, but sometimes it takes days) you can see that the dog can relax even if the children are in the same room. You can now try to take the children with you when you go for a walk with your dog. At the beginning he will still be afraid and not relaxed, because they are moving and may be closer to him. Tell the children to ignore the dog and be relatively calm or, if they want to run and play, stay away form the dog. If you have to go for a walk and you have to take the children with you, even when he does not relax, yet, tell the children not to go nearer to the dog than 1 meter. And then, after half an hour or an hour, when you feel that he must urinate but can't, tell them to make a 50 meters foot race. They have to start 3 meters in front of you and the dog, have to run AWAY form you and the dog and when they finished, they have to wait for you and the dog. Don't allow them to run back, the dog will be afraid. But I'll bet that the dog will use the time of the race and the absence of the children to urinate.
5. Show the dog that the presence of children means food and fun
If the dog can be relaxed on a walk and urinate even if they are close to him, it is now time to teach him that children are positive. The children can now try to contact the dog (Maybe the dog already tried to contact them. Wonderful. Hopefully they didn't freak out and were excited - that would frighten him again - but reacted calmly and like nothing special has happened). Give the children some treats and they have to throw it on the ground near to the dog. Than, if the dog does not take it, let it where it is and do something else with the children. Ignore the dog. He will come after a while and take the treat, but usually in a moment where nobody watch him. If you see that, don't react to it (don't be excited or praise the dog), but you can now make another try. Let the children throw some treats. If he takes it immediately, they can throw to a nearer distance, so the dog has to move. If not, ignore... the same as before. If he stands directly in front of the children, they can place the treats on their hands. And they can wait that he eats the treats directly from their hands. If he does so, don't let them petting him. He still may not like that.
6. Teach the dog that children can pet him
First of all, the dog may be a dog, who never will love when children hug him very much and pet him all the time. You and the children have to respect that. But maybe you can teach the dog to accept a little petting and maybe he can learn that it feels good, if they tickle him a bit. The children have to be very calm. They can hold a treat in their hand, but have the hand closed so that the dog can't reach it. Maybe he will sniffle and try to get it. The children now can try to pet him with the other hand very softly and calmly. If he is afraid and runs away or is shocked, tell the children to stop trying to touch him, until he is as relaxed as before. Otherwise the children can open the hand with the treat and give it to the dog.
Some last words for working with very active children and scared dogs:
Most children will understand your orders to stay away from the dog, if you explain it to them. Tell them that the dog is very afraid and that he can't understand love letters, hugs or petting. Explain that they would be afraid, too if some strange humans, which are much bigger than they are and who are loud and wild, try to hug them. They will understand and most of the children will respect that. But children are often impatient. If you recognize that, try to show them how much better it is now in comparison to the first times.
But don't lie to them. If you see that the dog does not like petting, hugging and fast moving children at all and that he can barely relax if they are in the same room, even after weeks, tell them. Tell them that he is not a puppet or a teddy bear and that they will never can do this. Explain them that this is not their fault and that they are wonderful and beloved children, but that this dog is too frightened. They may be sad, but that is better than an always terrified dog who may bite one day, if he can't handle the petting anymore.