PsIlove - I am assuming that the children are subject to a Care Order made in court last year, with a care plan of permanent fostering. Contact would not have been defined in court. As part of the care plan it would be said that the intention was for the children to maintain in direct contact with their birth parents and siblings. Much depends on the age of the children. If the children are of middle years (say 7 - 12) then contact would normally be quarterly, or x 6 per year to cover a contact at Christmas (not on Christmas day) on the birhday and to offer one contact during each school holiday. In my experience it woud be very unusual to allow unsupervised contact, given that there is a Care Order and the LA are in fact the corporate parent and if anything nasty happened during unsupervised contact they would be held to account.
What age are your children Ps? If you don't want to say please feel free to PM me. I can see why you are concerned. Taking Corsa's point, decisions about contact should be made at the LAC review. The thing is though that at every LAC review (which of course will continue on a 6 monthly basis) until these children are 18, contact is one of the issues that has to be considered, as to whether it should be increased, decreased or change of venue etc. The other thing that has to be considered in every review is whether the children can return home. I don't want to worry you because I have never known (in 30 years working as a sw and tm mgr for a LA) children who are permanently fostered returned to their parents, but it is there in the LAC review matters that need to be considered.
What normally happens (well at least in the LA where I worked) was that once a plan was made for permanent foster care, contact with parents was reduced, and as I said in the first para it depends a lot on the individual case, the age of the children, and whether this contact would be in their best interests.
In a sense the ball is in your court because as you say you have not yet been formally approved as long term carers. I think you should have a meeting with the social worker (his/her tm mgr) your link worker and yourselves to address your concerns. There are differing views on contact and judges will almost always agree with quarterly or x 6 per year, but on the basis of this being supervised. Social workers often try to appease the parents by offering more contact than is good for the children, and this needs to be challenged. Contact should be in line with the best interests of the children.
How long has it been since your LOs were removed from home, do they talk about their parents, does their behaviour change before and after contact (although in all honesty this is not at all unusual) but needs to be observed to inform decisions about future contact. I have to say though that even when contact is supervised it only takes a few seconds for birth parents to undermine the placement e.g. "they don't love you, they only want you for the money" - "play up with those foster parents so you can come home" etc etc and unsurprisingly this caused much confusion for the children.
I think the older children who are having unsupervised contact are admitting that their parents are saying negative things about the placement of your children (have I got that right) and is a most definite reason why your LOs should not have unsupervised contact, though you cannot stop parents whispering undermining things - I've heard of it so many times. Mostly children know instinctively where they are best off and don't take much notice.
SO press for that meeting and don't let them fob you off, and discuss your concerns. Make it clear that you are worried for the children (not that much against the nat parents - even if you are!) and be honest, saying that your concerns about contact don't seem to have been addressed and you are disatisfied. There is need for negotiation and compromise here and you may have to accept that contact is usually the case for children in permanent foster care, but the social workers in turn need to be taking your concerns seriously.