Claims that sex abuse victims were betrayed by all sections of society – including the police, courts, the health service, schools and the BBC – are to be examined by a Hillsborough-style independent inquiry.
An expert panel will also have the power to scrutinise the behaviour of political parties, the security services and private companies amid allegations that paedophile networks operated with impunity in the 1970s and 1980s.
It is expected to receive a flood of new claims of an establishment cover-up of child abuse during those decades.
The panel will report on its interim findings ahead of the General Election next May in a move to reassure critics that the issue will not be pushed aside and forgotten. The moves were announced after David Cameron promised to "leave no stone unturned" to track down the abusers and find out how they went undetected for so long.
Details of the investigation were announced by Home Secretary Theresa May, who raised the possibility of converting it into a full public inquiry and giving the panel authority to subpoena witnesses.
One of the MPs who had pressed for an overarching inquiry has revealed she was the victim of sex abuse. Tessa Munt, the MP for Wells, told Radio 4's PM programme: "I'm a survivor. This isn't about me, it's about the victims who are not in a position to be able to speak up and say for themselves that I've got my life back together, because some of these people will have been suffering for 50, 60, 70 years and we absolutely have to deal with this stuff.
"I had a period in my life which was not happy. I was the victim of sexual abuse but with the support of my family and friends I have dealt with that."
Ms May promised the inquiry team would have the fullest access to Government papers, including classified documents where they did not affect national security.
The Home Secretary also made plain that political parties would be within the inquiry's remit and said the panel's composition and terms of reference would be set out shortly. She also announced a separate review into the Home Office's handling of sex abuse allegations between 1979 and 1999.