An inquiry into allegations of mistreatment – including sexual abuse – at a Belfast boys’ home has restarted amid claims MI5 agents knew about the alleged abuses but chose to use them to blackmail pedophile public figures.

The Historical Institutional Abuse (HIA) Inquiry reconvened on Tuesday to examine allegations dating as far back as the 1970s. It is alleged boys at the Kincora care home in Belfast were subject to vicious abuse.

The inquiry will hear from claimants who allege a VIP pedophile ring preyed on those who lived there.

Underlying the allegations are suggestions MI5 – the UK’s internal security service – knew about the claimed abuses. Rather than reporting them, however, MI5 is alleged to have used its knowledge to blackmail senior political figures.

In August 2014 former intelligence officer Captain Brian Gemmell claimed that his attempts to investigate at the time were cut short by his superiors.

He told the Independent that before he was told to leave the Kincora case alone in the mid-1970s “on the grounds that the service didn’t involve itself with homosexual matters, I had a meeting at a hotel on Buckingham Palace Road.”

He said three members of MI5 had spoken to him about “a known Protestant terrorist, John McKeague of the Red Hand Commandos, being homosexual, and they asked me if I thought he could be blackmailed over his homosexuality, because they had film of him.”

The inquiry is being led by former High Court judge Sir Anthony Hart.

In 1981 three men were jailed for abuse at Kincora. Among them was Kincora “house father” William McGrath, who has been described as a Protestant fanatic and an MI5 informant.

The inquiry is expected to report in early 2017.