Hi Donna,
Welcome to the forums! You've got a very serious question here - I strongly recommend that you locate a professional trainer in your area who is experienced in positive methods of behavior modification. APDT.com is an excellent resource for locating trainers, learning about various types of training available, they even have free webinars and other (free) resources. You could also consult with your vet to see if they can recommend a local trainer or behavior consultant who can help you set up a program to help your poor little guy.

Meanwhile, while you are getting a training program underway to help your new dog overcome his fears, you can help him to succeed in everyday life by setting his environment up to be as calm, stress-free and trigger-free as possible. Triggers are anything that cause him to demonstrate fear or fear-induced aggression. Partially this is his age - dogs go through a "fear" stage around 4-5 months of age - but since you also know he has had a rough start, he could either have developed a strong aversion to small children OR they just happen to be the nearest point on which to focus his fear when he gets overwhelmed. Even in well-balanced dogs, children constitute a high bite demographic because they move around in jerky, sporadic motions and look very much like "prey" (and, honestly, because they're close to the ground and right at teeth level) So anyway. If you have children in your home, unfortunately, for a while this means they shouldn't have any contact with the dog (for everyone's safety). Eventually they will be able to participate in his rehabilitation program, and will even become a very important part of it, but not yet.

As long as you are speaking to your vet, get him checked out for any physical problems - pain will exacerbate his stress - and see if the vet can recommend a holistic or pharmaceutical relaxant. There are a lot of options available in both holistic and chemical category, basically various versions of doggie Prozac. Recently Thundershirts have become extremely popular. Like people, all dogs are different and respond to stress and calming agents differently, so any available stress-reducer only work for about 20-50 percent of dogs; try out different options or different combinations until you find something that seems to help calm him. These, however, are just "band-aids". Only thorough and consistent training (such as bite inhibition) and behavior modification (teaching him to make positive associations with formerly "scary" triggers) will effect a long-term solution.

Best of luck!
Megan