The head of the children's charity NSPCC is to lead a review of historical child sex abuse allegations, Home Secretary Theresa May has announced.
Peter Wanless's review, which will cover how police and prosecutors handled information given to them, is expected to report within 10 weeks.
A Hillsborough-style inquiry will also be held, led by an independent panel of experts on law and child protection.
This would be wide-ranging and would not report before the next election.
Mrs May, who said the panel inquiry could be converted into a full public inquiry if necessary, said she wanted to ensure the public had confidence that serious crimes were being investigated.
For Labour, shadow home secretary Yvette Cooper welcomed the announcements, adding: "We need to know what happened when these allegations were first raised even decades ago, when you will know that former cabinet ministers have said there may have been a cover-up."
Mrs May, addressing MPs after weeks of increasing questions about how past claims of child sex abuse were handled, said Mr Wanless would be assisted in his review by a senior legal figure.
Prime Minister David Cameron has vowed that the investigation into how public bodies handled abuse claims will "leave no stone unturned".
Historical child abuse claims: Key questions answered
Why has this come up now?
Labour MP Simon Danczuk last week called on Leon Brittan to say what the then home secretary did with documents he was passed in the 1980s containing allegations about powerful figures and paedophilia.
What happened to the files?
Lord Brittan passed them to Home Office officials and a 2013 review found the minister had acted appropriately.
What did the papers allege?
The allegations, compiled by Tory MP Geoffrey Dickens, were set to "blow the lids off" the lives of powerful child abusers, the MP's son has said. The late Mr Dickens said he planned to expose eight such figures.
The review led by Mr Wanless centres on concerns the Home Office failed to act on allegations of child sex abuse contained in a dossier handed over in the 1980s by former Tory MP Geoffrey Dickens.
Mrs May said: "I want to address two important public concerns: first that in the 1980s the Home Office failed to act on allegations of child sex abuse and second, that public bodies and other important institutions have failed to take seriously their duty of care towards children."
The government will "do everything we can to allow the full investigation of child abuse and the prosecution of its perpetrators", she said, and will do nothing to jeopardise those aims.
"There would be a presumption of "maximum transparency" and "wherever institutions and individuals have failed to protect children from harm we will expose those failures and learn the lessons".
The Home Office's senior civil servant Mark Sedwill commissioned a review last year into the department's handling of child abuse allegations between 1979 and 1999, including the information provided by Mr Dickens.
That review discovered that 114 files relating to historical allegations of child sex abuse were not available. "These are presumed destroyed, missing or not found," she said.
The investigation found no record of specific allegations by Mr Dickens of child sex abuse by prominent public figures.
But while Mrs May said she was confident that the work commissioned by Mr Sedwill was "carried out in good faith", the Wanless review would address the public's need for complete confidence in the integrity of the investigation's findings.
She anticipated that witnesses would be able to "speak freely", although she would have to consider the restrictions of the Official Secrets Act in some cases.
"It's only if people can speak openly that we can get to the bottom of these matters," she said.
Nearly 150 MPs have called for an "over-arching" inquiry into alleged child abuse.
Ex-education minister Tim Loughton said Monday's move was a "major step forward" but his colleague Mark Reckless told Channel 4 News a judge-led inquiry was needed to subpoena witnesses and obtain documents.
Mrs May's statement comes as ex-Home Secretary Leon Brittan defended his dealings with the material given to him by Mr Dickens.
"It has been alleged that when I was home secretary I failed to deal adequately with the bundle of papers containing allegations of serious sexual impropriety that I received from the late Geoff Dickens MP," Lord Brittan said in a statement.
"This... is completely without foundation - as evidence from the Home Office's own report supports."
He said Mr Dickens had thanked the Home Office for the way in which the information he provided was handled and "for following up the cases that I keep sending to it".
1982: MP Geoffrey Dickens says he plans to expose eight prominent figures as paedophiles.
1983-84: Mr Dickens passes files to the Home Office.
February 2013: The Home Office reviews hundreds of thousands of files, searching for information it received about organised child sex abuse.
1 July 2014: Labour MP Simon Danczuk demands to know what the then Home Secretary Leon Brittan did with the files from Mr Dickens.
2 July 2014: Lord Brittan says he passed that material to officials.
4 July: The prime minister orders a senior civil servant to look again at the 2013 Home Office review.
7 July: Lord Brittan dismisses claims he failed to act appropriately on Mr Dickens' claims as "completely without foundation".
However, Douglas Hurd, Lord Brittan's successor as home secretary, said he knew nothing about allegations of child abuse made by Mr Dickens.
"Not a word," Lord Hurd told BBC's World Service. "I never heard any story about that subject and I think in fact if there'd been something in it I would somehow have got to hear. I didn't. I know nothing about it."
A number of inquiries are already taking place into alleged child abuse, including the extent of abuse by Jimmy Savile at schools, NHS hospitals, care homes and the BBC.
On Monday, Greater Manchester Police said it was considering widening its investigation into allegations of a cover-up involving paedophile abuse at Knowl View residential school in Rochdale in the 1980s and 1990s.
It said Rochdale Council had agreed to suspend its own inquiry while it considered how to proceed.