David Steel was blasted today after complaining he had been made a 'political scalp' as he announced he would quit politics over his failure to unmask brutal and sadistic paedophile MP Cyril Smith.

The ex-Liberal leader made the self-pitying remarks as he announced he would retire from the House of Lords after being castigated for his inaction in the 1970s and 1980s by the Independent Inquiry into Child Sexual Abuse (IICSA).

The sickening acts of obese sex attacker Smith against young boys in care were known about more than 40 years ago but no action was taken before his death in 2010.

But Lord Steel admitted last year he failed to pass on the allegations against the extrovert Rochdale MP even though he believed them to be true, because it was 'past history'.

The peer, party leader until 1988, later recommended Smith for a knighthood and the violent predator went on to represent the Lancashire town for the Liberal Democrats until 1992.

Announcing he had quit the Liberal Democrats this afternoon he made the staggering claim that he had been made 'proxy' for Smith because he is dead and cannot be prosecuted.

But a representative of some of Smith's victims blasted his attitude. Richard Scorer, a specialist abuse lawyer at Slater and Gordon, said: '(Lord) Steel's total inaction after being told by Smith himself that he had molested young boys is unforgivable, most of all for those victims whose abuse he could have stopped.

'To suggest Steel is a scapegoat, as some have done, is grasping at straws - a pathetic attempt to excuse a man who admitted he knowingly turned a blind eye to Smith's crimes.

Lord Steel (left) admitted last year he failed to pass on the allegations against the extrovert Rochdale MP (right) even though he believed them to be true, because it was 'past history'

The sickening acts of obese sex attacker Smith (right, with David Steel) against young boys in care were known about more than 40 years ago but no action was taken before his death

'He is not being blamed for them but for his own failure to stop Smith when he had the chance.'

What is the Independent Inquiry into Child Sexual Abuse and why was it set up? The Independent Inquiry into Child Sexual Abuse is a public inquiry set up by the government in 2015 because of concerns that organisations had failed and continue to fail to protect children from sexual abuse. It was set up after investigations in 2012 and 2013 into the Jimmy Savile sexual abuse scandal revealed widespread abuse had been covered up. In 2014 Labour MP Tom Watson told the Commons there was evidence of a paedophile ring in Westminster linked to No 10. Months later Theresa May, then Home Secretary, announced the inquiry would take place the following year. Its scope included investigations into 13 areas of abuse: Children in the care of Lambeth Council

Children in the care of Nottinghamshire councils

Children in the care Rochdale Council by Sir Cyril Smith

Child sexual abuse in the Anglican Church

Child sexual abuse in the Roman Catholic Church

The sexual abuse of children in borstals and young offender's institutions

Child sexual abuse in residential and boardings schools

The internet and child sexual abuse

Child exploitation by organised networks

The protection of children outside the United Kingdom

Reparations for victims and survivors

Allegations of child sexual abuse linked to Westminster Advertisement

Today the Independent Inquiry into Child Sexual Abuse (IICSA) criticised Lord Steel as it said the political establishment in Westminster 'repeatedly failed to deal with allegations of child sexual abuse', covering up claims and protecting high-profile MPs including Smith.

In a statement Lord Smith: 'Knowing all I know now, I condemn Cyril Smith's actions towards children.

'I regret the time spent on pursuing Leon Brittan, Lord Bramall and others, who it is clear had done no wrong.

'Not having secured a parliamentary scalp, I fear that I have been made a proxy for Cyril Smith.'

He added: 'Contrary to some reports, at no point did Cyril Smith admit to me the truth of the allegations in the Private Eye report.

'He admitted that there had been an investigation by police of acts alleged against him whilst he was a councillor in another political party, as was reported.

'Smith and I did not discuss further what IICSA counsel himself correctly described as ''a very very brief conversation'' in 1979.'

Public hearings into the Westminster strand of the inquiry were held over three weeks in March last year, with the panel saying its findings would look at how institutions handled complaints rather than investigating the credibility of allegations themselves.

During one hearing, Lord Steel denied 'hiding his head in the sand' over child abuse allegations against Smith, but said he 'assumed' the former Rochdale MP had abused teenagers at a hostel dating back to the 1960s.

He told the inquiry: 'These allegations all related to a period some years before he was even an MP and before he was even a member of the party, therefore it did not seem to me that I had any position in the matter at all.

'He accepted the story was correct. Obviously I disapproved but as far as I was concerned it was past history.'

On recommending Smith for a knighthood, Lord Steel said: 'If I had any suspicion that these activities had been continuing or he had been involved in it as an MP I certainly would not have recommended him for a knighthood - that would have been my natural instinct.'

Scottish Liberal Democrat leader Willie Rennie said it was right that Lord Steel had left the party and was stepping down from public life.

How Tom Watson championed fantasist Carl Beech and helped spark inquiry that damned him today Tom Watson claimed in Parliament that he had seen 'clear intelligence suggesting a powerful paedophile network linked to Parliament and No 10.' Two years later he met with Beech, 51, who could therefore brag to police that Mr Watson was his confidante, protector and a key part of a 'little group supporting me' as he made baseless claims of sexual abuse and murder in Westminster. But last year these claims were destroyed after Beech was convicted of 12 counts of perverting the course of justice and one of fraud. Mr Watson said previously: 'I met the man I knew as 'Nick' once, on 8 July 2014, two years after I had raised my question in Parliament. During that meeting Nick said very little and did not name any of his alleged abusers. 'I reassured Nick that the police had made clear that all allegations of historic sex abuse would be taken seriously and treated sensitively. 'It was not my role to judge whether victims' stories were true. I encouraged every person that came to me to take their story to the police and that is what I did with Nick.' Advertisement

Mr Rennie said: 'Cyril Smith's acts were vile and repugnant and I have nothing but sympathy for those affected.

'This is a powerful report that has lessons for everyone, including David Steel, the Liberal Democrats and the wider political sphere.

'It is therefore right that David Steel has decided to resign from the Liberal Democrats and retire from public life including the House of Lords.'

The report found no evidence of a coordinated 'paedophile ring' in Westminster, following claims by fantasist Carl Beech of its existence, and also stated there was no proof such a network was covered up by security services or police.

But it said institutions 'regularly put their own reputations or political interests before child protection'.

Professor Alexis Jay, who chaired the inquiry, said: 'It is clear to see that Westminster institutions have repeatedly failed to deal with allegations of child sexual abuse, from turning a blind eye to actively shielding abusers.

'A consistent pattern emerged of failures to put the welfare of children above political status although we have found no evidence of an organised network of paedophiles within government.

'We hope this report and its recommendations will lead political institutions to prioritise the needs and safety of vulnerable children.'

The report identified how former prime minister Margaret Thatcher and ex-Conservative party chairman Norman (now Lord) Tebbit were aware of rumours about MP Peter Morrison having 'a penchant for small boys' but did nothing about it.

The report said the allegations 'should have rung alarm bells in government'.

Professor Alexis Jay chaired the inquiry and said some politicians were better protected than the children they abused

But, instead, 'considerations of political embarrassment and the risk to security were paramount, while the activities of an alleged child sexual abuser who held senior positions in government and the Conservative Party were deliberately overlooked, as was the course of public justice'.

Indeed, the inquiry found there was a 'consistent culture for years' in the whips' offices to 'protect the image' of their party by 'playing down rumours and protecting politicians from gossip or scandal at all costs'.

It meant victims' interests were often overlooked, with many organisations failing to pass on allegations to police.

The report also found senior diplomat Sir Peter Hayman was the beneficiary of 'preferential, differential and unduly deferential treatment' over claims he sent obscene material in the post, following a meeting between his solicitor and the then-director of public prosecutions.

There was also 'striking evidence' of how 'wealth and social status insulated perpetrators of child sexual abuse' from being brought to justice, as in the case of Tory MP Victor Montagu.

The report stated: 'A consistent pattern that has emerged from the evidence we have heard is a failure by almost every institution to put the needs and safety of children who have survived sexual abuse first.'

The report made a number of suggestions including changes to the Honours system, re-examining the policy over posthumous forfeiture of honours - which would strip knighthoods from the likes of disgraced entertainer Jimmy Savile, and creating widespread and well-understood whistleblowing policies for all Westminster institutions.

The Government has also been urged to review its child safeguarding policies, and for all legitimate political parties to have a 'comprehensive safeguarding policy' overseen by the watchdog.

£118m child sex abuse inquiry finds no evidence of Westminster paedophile network at the heart of government despite Tom Watson's 2012 claims from Nick the Fantasist

Britain's £118million child abuse inquiry today concluded Tom Watson's 'sensational' claims about a VIP paedophile ring operating at the heart of Westminster were completely false.

Mr Watson's backing for convicted child abuse fantasist Carl Beech, who was called 'Nick' by police, was 'a significant factor' in setting up the Independent Inquiry into Child Sex Abuse (IICSA).

But today the inquiry's damning report said there was 'no evidence' to back the former Labour MP's 2012 claims about 'clear intelligence suggesting a powerful paedophile network linked to parliament and No 10'.

The IICSA report said: 'Despite the inquiry engaging in an extensive evidence-gathering process, we have seen no material indicating the existence of a Westminster 'paedophile ring'. Similarly, no evidence of any attempts to cover up or suppress information about the existence of such a ring was found at MI5, SIS, GCHQ or in Metropolitan Police Special Branch records.'

Mr Watson quit as an MP before last year's general election and is rumoured to have been recommended for a peerage by Jeremy Corbyn despite his public backing for Beech, who was jailed for 18 years for falsely accusing a string of public figures including former Home Secretary Leon Brittan, who Watson called 'evil'.

But the inquiry has found that Westminster's institutions have 'turned a blind eye' to allegations of child sex abuse for decades with Margaret Thatcher accused of knowing Tory MP Peter Morrison had 'a penchant for small boys' but did nothing about it. She later made him her Private Secretary and gave him a knighthood.

The political establishment in Westminster 'repeatedly failed to deal with allegations of child sexual abuse', covering up claims and protecting high-profile MPs including Sir Cyril Smith, the damning report says, with Liberal leader Lord Steel accused of 'abdication of responsibility' for failing to act.

Tom Watson had claimed that there was a Westminster child sex abuse ring based on Carl Beech's evidence - but the fantasist better known as 'Nick' was later jailed for 18 years for his web of lies

The 190-page report documenting the latest findings of the Independent Inquiry into child sexual abuse linked to Westminster was released today and rubbishes Watson's paedophile ring claims

How Tom Watson championed fantasist Carl Beech and helped spark inquiry that damned him today Tom Watson claimed in Parliament that he had seen 'clear intelligence suggesting a powerful paedophile network linked to Parliament and No 10.' Two years later he met with Beech, 51, who could therefore brag to police that Mr Watson was his confidante, protector and a key part of a 'little group supporting me' as he made baseless claims of sexual abuse and murder in Westminster. But last year these claims were destroyed after Beech was convicted of 12 counts of perverting the course of justice and one of fraud. Mr Watson said previously: 'I met the man I knew as 'Nick' once, on 8 July 2014, two years after I had raised my question in Parliament. During that meeting Nick said very little and did not name any of his alleged abusers. 'I reassured Nick that the police had made clear that all allegations of historic sex abuse would be taken seriously and treated sensitively. 'It was not my role to judge whether victims' stories were true. I encouraged every person that came to me to take their story to the police and that is what I did with Nick.' Advertisement

The 190-page bombshell report on the Westminster strand of the inquiry, published today, has revealed:

Tom Watson's claims that there was a child abuse ring at the heart of Westminster had no foundation;

Tory bosses failed to tell police about child abuse allegations aimed at Sir Peter Morrison, a Parliamentary Private Secretary to Margaret Thatcher who died in 1995;

Ex-Liberal leader Lord Steel savaged for his 'abdication of responsibility' for failing to act on party colleague Sir Cyril Smith's child abuse;

10th Earl of Sandwich Victor Montagu, also a Tory MP for South Dorset, given a caution for indecently assaulting a 10-year-old boy;

The inquiry, chaired by Alexis Jay, heard from a host of high profile figures including Prince Charles, two ex-prime ministers, six former government ministers, a former Director General of MI5, three archbishops, one cardinal and 31 chief constables.

In addition, during the three weeks of public hearings about Westminster last year, the inquiry also heard from survivors, whistleblowers, cabinet ministers and MPs and police officers among others.

The inquiry, which is looking at 13 areas of public bodies where child abuse took place, will conclude in November 2020 with a final report expected next year.

Today's scathing report on its Westminster investigation revealed a significant problem with 'deference towards people of public prominence,' from the Whips' offices to the police and prosecutors.

MPs including Sir Cyril Smith and Sir Peter Morrison, in the 1970s and 1980s, were known to be active in their sexual interest in children, but were protected from prosecution.

Giving evidence, former Liberal Party leader Lord Steel said that because allegations against Smith had arisen before he joined the party, he saw 'no reason, or no locus to go back to [it]'.

This failure to recognise the risks was an abdication of responsibility, and the fact the offences were non-recent was irrelevant, the report said.

Richard Scorer, a specialist abuse lawyer at Slater and Gordon, representing eight of Sir Cyril Smith's victims, said: '(Lord) Steel's total inaction after being told by Smith himself that he had molested young boys is unforgivable, most of all for those victims whose abuse he could have stopped.

'To suggest Steel is a scapegoat, as some have done, is grasping at straws - a pathetic attempt to excuse a man who admitted he knowingly turned a blind eye to Smith's crimes. He is not being blamed for them but for his own failure to stop Smith when he had the chance.

'This must surely now be the catalyst for a mandatory reporting law, compelling those who suspect child abuse to report their concerns, and for an end to this culture of deference towards those in power which allowed Smith to evade justice for so long.'

The report found no evidence of a coordinated 'paedophile ring' in Westminster, following claims by fantasist Carl Beech of its existence, and also stated there was no proof such a network was covered up by security services or police.

But it said institutions 'regularly put their own reputations or political interests before child protection'.

Professor Alexis Jay, who chaired the inquiry, said: 'It is clear to see that Westminster institutions have repeatedly failed to deal with allegations of child sexual abuse, from turning a blind eye to actively shielding abusers.

'A consistent pattern emerged of failures to put the welfare of children above political status although we have found no evidence of an organised network of paedophiles within government.

'We hope this report and its recommendations will lead political institutions to prioritise the needs and safety of vulnerable children.'

Ex-Liberal party leader Lord Steel failed to pass on child abuse allegations against prominent colleague Sir Cyril Smith (pictured together), even though he believed them to be true

Prime Minister Margaret Thatcher with her private secretary Sir Peter Morrison, whose Tory colleagues have been accused of hiding his alleged child abuse from police

The report identified how former prime minister Margaret Thatcher and ex-Conservative party chairman Norman (now Lord) Tebbit were aware of rumours about MP Peter Morrison having 'a penchant for small boys' but did nothing about it.

The report said the allegations 'should have rung alarm bells in government'.

But, instead, 'considerations of political embarrassment and the risk to security were paramount, while the activities of an alleged child sexual abuser who held senior positions in government and the Conservative Party were deliberately overlooked, as was the course of public justice'.

The Conservative MP for Chester, had also been caught by police molesting a 15-year-old boy on a train at Crewe. The report reveals that the Tory party made efforts to suppress these rumours rather than conduct a formal investigation.

Indeed, the inquiry found there was a 'consistent culture for years' in the whips' offices to 'protect the image' of their party by 'playing down rumours and protecting politicians from gossip or scandal at all costs'.

It meant victims' interests were often overlooked, with many organisations failing to pass on allegations to police.

The report also found senior diplomat Sir Peter Hayman was the beneficiary of 'preferential, differential and unduly deferential treatment' over claims he sent obscene material in the post, following a meeting between his solicitor and the then-director of public prosecutions.

There was also 'striking evidence' of how 'wealth and social status insulated perpetrators of child sexual abuse' from being brought to justice, as in the case of Tory MP Victor Montagu.

The report stated: 'A consistent pattern that has emerged from the evidence we have heard is a failure by almost every institution to put the needs and safety of children who have survived sexual abuse first.'

Montagu's son Robert, who he also sexually abused for over five years, said the decision not to prosecute was 'entirely wrong and very indicative of the attitude towards people in public positions'.

The report concludes that these are examples of a political culture which 'values its reputation far higher than the fate of the children involved.'

The report's findings were also damning of modern political parties. As recently as 2017, Green Party election candidate Aimee Challenor was able to appoint her father as election agent, even though he had been charged with sexually assaulting a child and was later convicted.

The Inquiry also investigated the Paedophile Information Exchange (PIE), which campaigned in the 1970s to lower the age of consent, as well as public acceptance of paedophilia.

A number of its members sexually abused children, including Sir Peter Hayman, a former High Commissioner to Canada. The report concludes that PIE was given 'foolish and misguided' support for several years by organisations who 'should have known better.' Those organisations included the National Council for Civil Liberties and the Albany Trust.

The report made a number of suggestions including changes to the Honours system, re-examining the policy over posthumous forfeiture of honours - which would strip knighthoods from the likes of disgraced entertainer Jimmy Savile, and creating widespread and well-understood whistleblowing policies for all Westminster institutions.

The Government has also been urged to review its child safeguarding policies, and for all legitimate political parties to have a 'comprehensive safeguarding policy' overseen by the watchdog.

Much of the evidence for the inquiry stemmed from a public hearing in the Westminster investigation held from between March 4 and 29 last year.

As of September 30 last year, the cost of the inquiry was £118.25m. The mass inquiry required two and a quarter million pages of evidence processed.

It is expected to conclude with a final report next year.