It is a difficult one.
We used to live in a flat in the centre of a city and so my daughter had never been allowed out to play on the streets, it was always at a friends house or if she was taken to the park (we didnt have a garden).
But after our 3rd was born we moved into a house on a quiet cul de sac. My eldest was 7 and a half, and quickly made friends with a couple of children living on the same street.
After a month or two of settling in I finally let her go out playing, but I was so paranoid something would happen to her I watched constantly out of the window!
I still let her out to play now, but I still worry about her! She is very sensible, but some of the other children really are not! They disappear off round the block (not my daughter she knows she's not allowed!), some of them run across the road without looking, and one of them, who is only 6, stays out til 10pm!!
My second daughter is 4 now, and quite often wants to go out to play with them all but there is no way she is allowed. She is far too young and not aware of the dangers around her yet, let alone picking up habits of spitting and throwing stones like I see some of the younger ones do!
So she quite happily plays in the back garden.
When my eldest daughter is playing either inside the house or in the back garden I put a limit on, say, 2 friends coming in too, otherwise the house ends up demolished! It used to annoy me when they all used to just traipse in, whole crowds of them!!
I think its all about setting limits. You have to assess how much or how little you want your children to do with these other children, in my own opinion (and it is only my opinion, you may think differently), but I would say your 3 year old is too young to be out and about with the older children.
The little brother of the 6 year old I mentioned above, he is 3. He has his own key to the front door (which he regularly loses!), he goes off up to the local shop on his own, and stays out late on his own. Even though it is a quiet cul de sac there is no way I'd be letting my child do that. He swears, spits, etc, I dread to think what he will be like as a teen!
I am waffling on a bit now, but all I'm trying to say is set limits for them. Only allow one or two children in to play at a time and see how it goes from there.
You may feel a bit mean at first if you decide your 3 year old cannot go out and play but you'll probably be greatful you did it in the long run!
xxxxx