Obviously the poor old dog is suffering some discomfort from an as yet undiagnosed ailment and the children are causing him pain. Could be arthritis, bad hips or something much more serious. He's reacting in the only way that a dog can to let them know they're inflicting pain.

The first thing I'd do would be to take the dog to the vet, have him checked over from head to toe and do a complete blood panel. In the meantime I'd keep him completely away from the kids. The dog isn't the one going after the kids, it's the other way around.

Only after a complete health check would I begin thinking about what to do next!