Theresa May has announced the head of the new National Crime Agency will lead a six month inquiry into both historic and new allegations of abuse at a North Wales care home.
Keith Bristow is be aided by the Serious Organised Crime and Child Exploitation and Online Protection Centre in his investigation, which will look into abuse at 40 other homes.
The home secretary also confirmed there would be a review into whether the Waterhouse Inquiry was conducted properly.
The government were treating fresh allegations of child abuse with the "utmost seriousness" she told the Commons, saying in a statement: "Child abuse is a hateful, abhorrent and disgusting crime and we must not allow these allegations to go unanswered."
However she warned ministers against using using parliamentary priviledge to name the Tory, saying such an action could jeopardise justice for the victims.
The inquiries were announced after BBC's Newsnight broadcast an interview with Steve Messham who said he had been abused by a senior member of the Conservative party whilst living at Bryn Estyn children’s home in the 1980s.
He claimed an inquiry into abuse at Bryn Estyn led by Sir Ronald Waterhouse in 2000 looked at only a fraction of the allegations. More than 80 people were named in that report with 140 claims of compensation settled.
Labour MP Tom Watson told the house children had been abused "from Wales to Whitehall" and accused the reviews May has announced as amounting to "the next stage of a cover-up".
Echoing Yvette Cooper, he called for a wider overarching inquiry, saying that if lessons have been learned from Hillsborough and phone hacking, it showed giving an inquiry narrow remit allowed a cover-up to take place.
May says the police will be able to investigate "without fear or favour" and will be allowed to go wherever the allegations take them.
She said consider Labour calls for a wider, over-arching inquiry into child abuse - including the allegations involving the late DJ and BBC presenter Jimmy Savile - if the evidence in April's report was shown to justify it.