1. In seafaring, a young male sailor in Her Majesty's Navy, usually of slender disposition who was designated to sit on a peg to keep his anus loose for penetration by the other sailors.
2. In more modern times, a derogatory term denoting a sissy, a fag, or a feminine sailor.

A young male prostitute, refering to an alleged (and most certainly apocryphal) naval practice of enlisting a young boy solely for the sexual gratification of the crew, and seating him on a peg to keep him "loose."