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@allister
Our experience at Meadowbank and Glasgow is that "position is everything" for a youngster on a track bike as a poor position will sap the meager power they have and make the whole experience uncomfortable and more prone to spills.
We run kids in our club [http://www.theracers.org/] on 650C wheel bikes till they get to a saddle top to BB size of 64cm or so then move them on to a 700c bike of 48 to 50cm top tube size. A local club may well do a similar loan scheme as purchasing them at retail can mean a big loss.
I would be wary of a very small frame with 700c wheels as the geometry will be a real compromise between handling and dimensions.
You can always sell on a 650C track frame and use the parts on the next frame size up.
regards Allister