Our dog acts aggressive toward visiting children

Hi!
We have an almost 2yr old whippet who we adopted three months ago and has fit into the family like he has always been with us. We have two kids (2.5 & 5.5yrs) and he often seeks them out for affection or a cuddle and seems to be very happy in our home.

I am writing because when my kids have friends come to visit he will bark (VERY unusual for him) and act rather aggressive with hackles raised and also has a defensive posture, tail between legs etc. Reading his behaviour makes it seem like he could snap or get vicious - not something we have ever seen in him. He does not growl or bare his teeth but he does not act safely around the kids. He may occasionally bark at an adult who comes to the door but quickly stops and resumes his nap after I greet them. I was caught very off guard when this first happened since he has been so comfortable and engaging with our children.

I guess I am seeking help first to figure out what it is that may be bothering him since it is clearly directed at children visiting, is not direct aggression, maybe fearful or protective? It seems to be getting worse with visitors, not better.

Some things we have tried to no avail:
- child giving him a treat and praising good behaviour (he will take the treat, eat it and then continue his behaviour)
-child ignoring him turning back etc - this seemed to settle him a bit but once the child started playing with my kids he began his behaviour again.
- putting him on the lead and controlling him that way (praising good behaviour)
- crating him (he got hysterical and aggressive with this)


Overall he is very well behaved and has good recall. He chews things and will try to get food from the counter but we are seeing some results with our training in these areas. I take him on 45 min walks each day where he gets a good long run wiht other dogs in and then another 20-30 min walk at night. Out of the house he is very comfortable, has excellent social skills (dog and human) and excellent manners - including being friendly toward the children he meets. Interestingly he his behaviour was concerning with a girl on two different occasions but we ran into her on a walk and he was his friendly normal self - wagged his tail and gave her a lick hello.

Any advice or insight into what is causing this behaviour or how to help would be much appreciated!!