Former Conservative cabinet minister Lord Tebbit has said there "may well" have been a political cover-up over child abuse taking place at Westminster in the 1980s.
Lord Tebbit, who served in a series of senior ministerial posts under Margaret Thatcher, said the instinct at the time was to protect "the system" and not to delve too deeply into uncomfortable allegations.
His incendiary claim followed the admission by the Home Office that more than 100 files relating to historic organised child abuse over a period of 20 years had gone missing.
Appearing on BBC1's The Andrew Marr Show, Lord Tebbit said: "At that time I think most people would have thought that the establishment, the system, was to be protected and if a few things had gone wrong here and there that it was more important to protect the system than to delve too far into it.
"That view, I think, was wrong then and it is spectacularly shown to be wrong because the abuses have grown."
Asked if he thought there had been a "big political cover-up" at the time, he said: "I think there may well have been."
He added: "It was almost unconscious. It was the thing that people did at that time."
The extraordinary comments by one of Baroness Thatcher's closest political allies fuelled demands from MPs and lawyers for an over-arching public inquiry into all the disparate allegations of child abuse from that era.
They include claims of abuse by the late Liberal MP Sir Cyril Smith and allegations of paedophile activity at parties attended by politicians and other prominent figures at the Elm Guest House in Barnes, south-west London.
The permanent secretary at the Home Office, Mark Sedwill, said he will be appointing a senior legal figure to conduct a fresh review into what happened to a dossier relating to alleged paedophile activity at Westminster which was passed to the then home secretary, Leon (now Lord) Brittan by the Tory MP Geoffrey Dickens in 1983.
But critics said public confidence could only be restored by a fully transparent and independent inquiry.
In a letter to the chairman of the Commons Home Affairs Committee, Mr Sedwill disclosed that a previous review - carried out only last year - had identified 114 potentially relevant files from the period 1979 to 1999, which could not be located and were "presumed destroyed, missing or not found".
He said the investigation had also identified 13 "items of information" about alleged child abuse, nine of which were known or reported to the police at the time - including four involving Home Office staff. Police had since been informed of the other four cases.
Mr Vaz - who has summoned Mr Sedwill to appear before the committee on Tuesday - said the Home Office appeared to have been losing files on an "industrial scale".
Mr Sedwill said he had ordered the new investigation - following the intervention of Prime Minister David Cameron - in order to establish whether the findings of the previous review remained "sound".
The earlier review - conducted by an HM Revenue and Customs investigator - concluded the relevant information in the Dickens file had been passed to the police and the rest of the material destroyed in line with departmental policy at the time.
Alison Millar of the law firm Leigh Day, which is representing some of the alleged victims, said another internal Home Office review would not quell the growing public disquiet and that an independent inquiry is now an "absolute necessity".
"This cannot be another internal review held by those who may well be at fault, it will only fuel a growing suspicion amongst the electorate that there is a conspiracy over the abuse of children by those with great power," she said.
"To be relevant, and effective, any independent inquiry needs to create a safe environment for survivors of abuse to come forward so their voices can be heard. At the moment the allegations are so serious and go so far up in the Government, to make many survivors fear for their safety."
While Downing Street has previously been resisting calls for a wider inquiry, ministers today opened the door to the prospect - although they made clear ongoing police inquiries would take precedence.
Cabinet Office minister Francis Maude said the Government understood the need for openness "so that there can't be any hint of a cover-up".
"The first thing to do on this front is simply to have the inquiry, the investigation, that has been launched - that will be done very quickly and then let's see where that takes us," he told the Sky News Murnaghan programme.
"It may well be the answer then is to have a much broader inquiry, but I think it is too soon to come to that conclusion."
Shadow home secretary Yvette Cooper warned the "review of a review" announced by Mr Sedwill is "insufficient".
"We need a wide ranging review that can look at how all the allegations put to the Home Office in the 1980s and 1990s were handled," she wrote in a letter to Home Secretary Theresa May.
"The scope of this investigation must look at how the Home Office, other parts of Whitehall, the police and prosecutions agencies, handled allegations when they were put to them. But it also needs the flexibility to follow the evidence.
"Any stones left unturned will leave concerns of institutional malaise, or worse a cover-up, unaddressed."