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Never was there clearer evidence of the difference the Savile scandal has made to attitudes to allegations of child abuse.

The prime minister has broken into a trip to the Gulf to announce an investigation into allegations that abuse at a North Wales children's home went much further than an official inquiry revealed and may have involved a senior Conservative from the Thatcher era.

One source close to the prime minister told me "it reeks".

He was referring to allegations, first aired last Friday on the ´óÏó´«Ã½'s Newsnight, which suggested that victims of abuse at the Bryn Estyn children's home in the 1970s and 1980s were told by the police and the Waterhouse Inquiry that there was no evidence to back their recollection of who had abused them and, therefore, no reason to pursue their allegations further.

That is why Downing Street is aiming to appoint a judge to examine both "the scope and conduct of the original inquiry" into child abuse - to ask, in other words, whether the inquiry's terms of reference were set too narrowly to allow consideration of child abuse beyond one children's home in North Wales and whether allegations made by victims against public figures were wrongly excluded from the final report.

Number 10 is trying to learn from the ´óÏó´«Ã½'s handling of allegations about Jimmy Savile and, in particular, what is now widely seen to have been the mistake of insisting that the serious allegations were best dealt with by the police alone.

It is aware of the potential political damage of any perceived cover-up given that the allegations centre on a one-time senior Conservative - albeit someone who no longer has any involvement in frontline politics - and given that the Waterhouse Inquiry was set up by William Hague in 1996 when he was Secretary of State for Wales in John Major's government.

I am told that Number 10 have seen no evidence that is not already in the public domain. However, the fear amongst the prime minister's advisers is that children's homes may have been used by paedophiles who were prominent public figures and the authorities may have failed to investigate this properly.

PS: The ´óÏó´«Ã½, in line with many other news organisations, has chosen not to name the politician at the centre of these very serious allegations as we have no evidence beyond the interviews aired on Newsnight on Friday.

Correction 10 November 2012: The ´óÏó´«Ã½ has apologised unreservedly for broadcasting a report on Newsnight on 2 November over allegations of child abuse which transpired to have involved a case of mistaken identity. As a result the video of the original report has been removed from the website. More details can be found here.