By Steven Swinford

The Prime Minister said the historic allegations of abuse by a paedophile ring at children’s homes in Wrexham, North Wales, could not be left “hanging in the air”.

He said a senior independent figure would investigate whether a previous inquiry “properly did its job”.

Mr Cameron said: “Child abuse is an absolutely hateful and abhorrent crime and these allegations are truly dreadful and they mustn’t be left hanging in the air, so I’m taking action today.

“I’m going to be asking a senior independent figure to lead an urgent investigation into whether the original inquiry was properly constituted and properly did its job and to report urgently to the government.”

Steve Messham, the sexual abuse victim who made the claims, will meet David Jones, the Welsh Secretary, tomorrow.

He said a senior Tory politician had abused him in a hotel room with eight other paedophiles. However, he says that when he went to the police in the 1970s he was accused of being a “liar” and his claims were not properly investigated.

He was a witness at an inquiry led by the judge Sir Ronald Waterhouse into allegations spanning 40 homes between 1974 and 1990. The inquiry, which reported in 2000, dismissed the allegations as “embarking on the realm of fantasy”.

However, Mr Cameron has decided to investigate the inquiry after the allegations formed the centrepiece of an investigation featured on BBC’s Newsnight on Friday.

A legally binding order issued by Sir Ronald at the time of the inquiry banned the media from naming the politician and the man also made clear to the BBC last week he would sue if he was named.

But yesterday his name was widely circulating on the internet including through hundreds of messages on the social networking site Twitter. However several other politicians not suspected of any involvement were also included in the messages.

One current public figure was among those posting messages mentioning him and another identifying the man was reposted by other users more than 100 times.

Lawyers involved with the inquiry warned that those behind the Tweets could find themselves facing legal action.

They likened the breaches to a string of cases involving public figures who took out so-called super-injunctions but who were then named on the internet.

As happened on several of those cases, there were predictions last that the man could eventually be named in Parliament using special privilege protecting members from being sued for libel for comments in the Commons or Lords.

The speculation grew as the Children’s Commissioner for Wales, Mr Towler, called for a new inquiry into the allegations amid claims that the full scale of the abuse was covered up.

His comments followed a raft of claims that politicians from a previous Government were involved in or had links to those involved in sexual offences involving children.

Tom Watson, the campaigning Labour MP who helped expose the phone hacking scandal, said he had received scores of emails, calls and letters from the public containing potential leads after he raised the matter in the Commons 10 days ago.

He said that the allegations, involving “household names”, could potentially lead to bigger scandal than phone hacking.

In a posting on his blog Mr Watson said he had been reduced to tears by some of the allegations including claims abused children were marked with knives to show “ownership” or driven to golf course car parks to be exploited by paedophiles after they had finished a round of golf.

He said there had even been claims of “mysterious early deaths”, suspicious fires and other forms of threats and intimidation as part of a possible cover-up.

But he also disclosed that since raising the issue he had received warnings about his “personal safety”.

Richard Scorer, who represented Mr Messham said: “My view of this is that nothing would surprise me honestly.”

But he insisted: “The evidenced has to be properly investigated … I don’t say it’s true, I think it is quite possible that public figures could be involved in child abuse as almost certainly Jimmy Savile was.

“My view is that we’ve got to get a decent investigation going and look at it all.”

Mark Stephens, who represented around 15 of the children at the Waterhouse Inquiry, said: “I am convinced parliamentary privilege will be used to ask a question as to why this high-ranking politician who was named by a victim in the north Wales child abuse inquiry has been afforded protection.”

Speaking to The Daily Telegraph last week, the politician strenuously denied ever going to the home concerned. He was unavailable to comment on the internet claims last night.