Tapping a sheaf of paper in his hands, he told the Prime Minister that police had – or used to have – a file of evidence containing "clear intelligence suggesting a powerful paedophile network linked to Parliament and No. 10".

David Cameron leant forward, his brow furrowed.

Mr Watson continued: "One of its members boasts of his links to a senior aide of a former prime minister, who says he could smuggle indecent images of children from abroad."

The leads were never followed up.

Mr Watson said police ought to secure the evidence and re-examine it.

Mr Cameron played a straight bat in reply.

"I'm not entirely sure which prime minister he's referring to," he said, promising to "see what the government can do" about it.

Since then the "Westminster Paedophile Scandal", as it has come to be known, has bubbled away in the background of British crime and politics, never quite going away, but never coming to a head.

And now it is to be turned over again, in an independent inquiry into the failure of England's institutions to protect children from sexual abuse, which has officially opened this month.

The allegations had a long history before Mr Watson's question to Parliament. He had been briefed by investigative journalism website Exaro, which was digging into old rumours and finding fresh evidence.

However, they returned to the headlines this week, after the discovery of old Whitehall files thought destroyed. Among them was a November 1986 note from the director-general of MI5 to the cabinet secretary, referring to an MP with "a penchant for small boys".

The MI5 chief accepted the denial from the MP (later identified by The Times as Peter Morrison, who later briefly worked as one of Margaret Thatcher's aides and died in 1995).

However, he added that "the risk of political embarrassment to the government is rather greater than the security danger".

The phrase was seized on by campaigners as concrete evidence of what they had long claimed: an establishment whitewash.

Simon Danczuk, the Labour MP who worked to expose the double life as a child abuser of Liberal MP Cyril Smith, told The Times that the MI5 papers were "explosive".

"This confirms what I've long suspected: that the full weight of the British establishment, including MI5, colluded in a cover-up to protect politicians who sexually abused young boys," he said.

The claims focus on two London buildings. The Elm Street Guest House in south-west London was allegedly used in the 1970s and 1980s for parties attended by male government ministers, senior MPs, police officers, diplomats, judges and celebrities; there are even claims of links to royal courtiers. The building featured guest rooms, a sauna and a solarium. Soviet spy Anthony Blunt was have said to have visited, as did Cyril Smith. It is alleged that young boys were abused at the parties.

The other is a 1250-flat complex in Dolphin Square in Pimlico, near Westminster.

In December, police announced a witness had come to them with new allegations about sexual abuse by a paedophile ring with links to government, spy chiefs and prominent military figures.

The witness, dubbed "Nick" (not his real name), said he was abused at a luxury block of flats in Pimlico that was popular with MPs, from the age of seven in 1975 until he was 16.

He told the BBC the group were "very powerful people and they controlled my life for the next nine years".

They would arrange for chauffeur-driven cars to pick up boys, sometimes from school, and drive them to "parties" or "sessions" at hotels and private apartments in London and other cities.

"They had no hesitation in doing what they wanted to do," Nick said. "Some of them were quite open about who they were. They had no fear at all of being caught, it didn't cross their mind."

Nick also gave police extraordinary, sensational details of three murders.

He said he watched a boy being strangled to death by a Conservative MP, another child deliberately run over, and a third killed in front of a government minister.

Detective Superintendent Kenny McDonald said police believed his story: "Nick has been spoken to by experienced officers from child abuse teams and experienced officers from murder investigations. They and I believe what Nick is saying is credible and true."

Late last year, Scotland Yard issued an appeal to the public for help in tracking down possible suspects, witnesses or victims, relating to "allegations of serious and organised sexual abuse, and the murder of three young boys".

They also revealed they were investigating, in connection with this inquiry (named Operation Midland), the old case of a missing boy: Martin Allen, the son of a former chauffeur to the Australian high commissioner.

Martin Allen was 15 when he disappeared on November 5, 1979. His body has never been found.

He lived with his parents in the grounds of the Australian high commission in London. His father was chauffeur to the then high commissioner, Sir Gordon Freeth.

Police from Operation Midland spoke to Allen's family as part of the investigation.

"At this stage in the investigation, it is not possible to say if Martin's disappearance is linked [to the organised sexual abuse]," Superintendent McDonald said in December. "However, officers will keep the family updated on the progress of their investigation."

As well as Operation Midland and the independent inquiry, the Independent Police Complaints Commissions is investigating claims that police suppressed evidence surrounding the scandal.

Those who believe the claims of Nick, and others, believe that one of Westminster's darkest secrets is finally coming to light.

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