David Cameron has ordered an investigation into whether the North Wales child abuse inquiry "properly did its job" following allegations that a senior Tory was involved.
Cameron said he was taking action to make sure the "truly dreadful" claims were not left "hanging in the air".
The independent investigation will look at whether the Waterhouse Inquiry, held 12 years ago into abuse at the Bryn Estyn children's home in the 1970s and 1980s, was "properly constituted".
Steve Messham, a victim of the scandal, claims that a senior Conservative Party member was among those involved in abuse.
Martin Geissler, North of England Correspondent, reports:
Speaking in Abu Dhabi, Mr Cameron said
– David Cameron
These actions are truly dreadful and they mustn't be left hanging in the air.
So I am taking action today, first of all to make sure that Mr Messham can meet urgently with the Secretary of State for Wales so he he can hear his allegations and his points directly.
Secondly, I am 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.
But third, I would also urge anyone who knows anything about these matters to go to the police. That is where evidence should be taken so that action can be taken and we can deal with this dreadful, dreadful issue.
Downing Street said there was to be a separate process to consider the police response at the time of the original North Wales allegations.
Labour MP Tom Watson called on Mr Cameron to go further and establish a special police investigation into what happened.
In a letter to the Prime Minister, he said: "A dedicated police unit is essential, investigating the organised abuse of children, wherever it happened - from the seediest back streets even to Downing Street - without fear or favour of exposing the rich and powerful, or those who covered up for them,"
"And if it opens a floodgate of misery, then so be it. We will all feel dirtied and sickened - as we should. Victims have an absolute right to the whole truth."