Lord Brittan was accused of failing to act on a dossier of explosive paedophile allegations handed to him as Home Secretary

Lord Brittan's sudden death is a blow to victims of child abuse who were waiting to question him over his role investigating child abuse allegations in the 1980s, a campaigning MP has claimed.

Labour's Simon Danczuk said the Conservative peer's death was a 'sad day for his family' but also for the Government's inquiry into historic allegations of child abuse which has been beset by problems after being set up by Theresa May last year.

Two chairmen chosen by the Home Secretary were forced to step down after their personal connection to Lord Brittan emerged.

Child abuse survivors had accused Lord Brittan of failing to act on a dossier of explosive paedophile allegations handed to him as Home Secretary in the 1980s – an allegation he strenuously denied.

Speaking this afternoon after the Lord Brittan's death was confirmed, Mr Danczuk said: 'Not only is it a sad day for Leon Brittan's family, it's also a sad day for the survivors of child sex abuse, because they would have wanted to hear from Leon Brittan at this inquiry in terms of what he knew about the allegations that were made in the 1980s.'

Mrs May set up the inquiry into historic child abuse in July to find out whether public bodies had neglected or covered up allegations in the wake of claims paedophiles had operated in Westminster in the 1980s.

She announced today that a new chair would be appointed by the end of the month following a series of problems, including the resignation of two previous chairs over their alleged links to Establishment figures of the time.

The Home Secretary will also decide whether it will take the form of a statutory inquiry or a royal commission by the end of January, with both options having the power to compel witnesses and full access to evidence.

Mrs May said: 'I am clear that the new chairman must be someone who commands that confidence and who has the necessary skills and experience to carry out this vital work.

'In my work to find that person, as I told the House I would do, I have undertaken a number of meetings with the survivors of child abuse and their representative bodies And I have been deeply moved by the candour and the courage they have shown in telling me their harrowing stories and the experiences they have been through.'

The Home Secretary will decide whether the inquiry will take the form of a statutory inquiry or a royal commission by the end of Januar

Shadow home secretary Yvette Cooper called for the inquiry to be scrapped and relaunched with a new chair and statutory powers

Mrs May added: 'I am absolutely committed to finding them the right chairman to ensure they get the answers they deserve.

'But not only does this inquiry need the right Chairman, it also needs the right powers.

'That means the ability to compel witnesses, and full access to all the necessary evidence.

'In December I wrote to panel members to set out the three options which could give the inquiry these powers.

'I confirmed those options in my evidence that month to the Home Affairs Select Committee, and I also confirmed that I would make my decision on the right model for the inquiry and the chairman by the end of January.

'It remains my intention to make a statement to the House shortly after I have made that decision and after the necessary interviews and careful due diligence work have taken place.'

Ms Cooper called for the inquiry to be scrapped and relaunched with a new chair and statutory powers.

The Labour frontbencher said: 'Since November the allegations have become more serious.

Labour's Simon Danczuk said the Conservative peer's death was a 'sad day for his family' but also for the Government's inquiry into historic allegations of child abuse

'The police are now investigating allegations of child murder involving senior figures linked to Dolphin Square.

'A government file has emerged containing further potential allegations of abuse, clearly not seen by the Wanless review.

'These need to be investigated by the police, not just an inquiry, but it makes it even more vital that a serious and credible inquiry is under way with the confidence of the public and survivors.

'Given the seriousness of this, I now fear there is no choice but to start this inquiry again properly with a new chair and statutory powers and proper consideration of the scope and purpose involving the survivors themselves.

'This should not be beyond the wit of the Home Secretary.'

Keith Vaz, chairman of the Home Affairs Select Committee, said Mrs May was 'in danger of losing control of the process' and raised concerns about the allegation of bullying of a panel member by the inquiry's barrister.

Mrs May said survivor Sharon Evans's complaint had been investigated and no evidence of bullying found by Ben Emmerson QC.

The Home Secretary, meanwhile, revealed that allegations of 'unnatural sexual' behaviour at Westminster contained in a file found at the National Archives may have already been seen by the inquiry into the Home Office's handling of historic sex abuse claims.

Mrs May said the previously top-secret file may be a duplicate of one that was already looked at by NSPCC chief executive Peter Wanless and barrister Richard Whittam QC's inquiry into paedophile ring allegations in the 1970s, 80s and 90s.

University lecturer Dr Chris Murphy uncovered the once-classified document late last year at the archives in Kew, south west London.

After being questioned on the file, which was marked to indicate it had passed through former prime minister Margaret Thatcher's office, Mrs May told the Commons: 'You have made reference to the file that has come to light.

'We are checking that but as I understand it we believe it may be a duplicate of a file that was at the Home Office which was seen by Wanless and Whittam during their review but of course we are checking that.

'Any allegations in relation to that file will be passed to the police and those concerned to ensure that they are looked at properly.'

The file which came to light was found by Dr Murphy in November.