The scientists looked at the effects of alcohol on IQ, attention span, executive functions such as planning, organisation, and self-control in the five-year-olds.
They found low to moderate weekly drinking in early pregnancy had no significant effect on neurodevelopment of children at the age of five - and neither did binge drinking.
There were no differences in IQ test results in children whose mothers drank one-to-four units per week or five-to-eight units per week in pregnancy compared to children of abstaining mothers.
But drinking more than nine drinks per week was associated with lower attention span amongst the children.
The lead authors of the work, Ulrik SchiÃ¸ler Kesmodel of Aarhus University and Prof Erik Lykke Mortensen of the University of Copenhagen, Denmark said: "High prenatal exposure to alcohol has consistently been associated with adverse effects on neurodevelopment.
"Areas such as intelligence, attention and executive functions have been found to be particularly vulnerable.
"Our findings show that low to moderate drinking is not associated with adverse effects on the children aged five."
Patrick O'Brien, a spokesman for the Royal College of Obstetricians and Gynaecologists (RCOG) and a consultant obstetrician said the research was very well designed.
This was because it asked women about their alcohol intake at the time - rather than asking them to look back as past studies have done - and because it followed children for such a ling time and assessed such a range of developmental markers, he said.
The RCOG advises that women abstain from alcohol while pregnant, but if they do decide to drink evidence suggests "one or two units, once or twice a week, is acceptable after 12 weeks of pregnancy".
Dr O'Brien said: "These findings suggest low to moderate drinking has no significant effect on children aged five. However, this does not mean that women can use this as an excuse to indulge in more than the recommended amount in the UK.