Is it allowed for children to read and write fictional stories...?

Reading and writing fictional stories

 

Question: What is the ruling regarding reading or writing fictional stories and those which arouse the imagination? And if some of them [aid in] rectify[ing] social problems, then is this permissible?

 

Response: Fictional stories are from lies which occupy the time of the writer and the reader without benefit, so abandoning busying oneself with them is preferable. And if writing and reading [fictional stories] occupies oneself from that which is obligatory then this [fictional stories] is prohibited. And if it occupies oneself from that which is recommended then this [fictional stories] is disliked. In any case, the time of the Muslim is valuable, so it is not permissible to spend it in that which there is no benefit.

 

Shaykh Saalih al-Fowzaan

ad-Durar an-Naadhirah fil-Fataaawa al-Mu'aasirah - Pages 644-645

al-Fowzaan - ad-Da'wah 1516, Jumaada al-Oolaa 1416AH

Writing fiction

The seventh question of Fatwa no. 6252
Q 7: Is it permissible for a person to write fiction stories, which are all lies, for children to read and learn from?
A: It is Haram (prohibited) for a person to write such false stories. The stories mentioned the Qur'an, the Sunnah and other factual stories suffice and serve as moral lessons.
May Allah grant us success. May peace and blessings be upon our Prophet Muhammad, his family, and Companions.

The Permanent Committee for Scholarly Research and Ifta'
http://alifta.net/Fatawa/FatawaChapters.aspx?languagename=en&View=Page&PageID=4415&PageNo=1&BookID=7