Former Liberal leader David Steel resigned from the Liberal Democrats on Tuesday after an independent inquiry into historic child sexual abuse said British political institutions had “significantly failed” over decades by prioritising political status over the welfare of children.

The Independent Inquiry into Child Sexual Abuse found evidence that key figures in Westminster had turned a “blind eye” to allegations of abuse by high-profile offenders. Lord Steel, who led the Liberal party from 1976 to 1988, was accused of an “abdication of responsibility” over allegations about his former colleague Cyril Smith.

Following the heavy criticism in the report, the 81-year-old said he would quit the Lib Dems and would retire from the House of Lords “as soon as possible” to avoid any further distress for his family and turmoil for the party.

“Knowing all I know now, I condemn Cyril Smith’s actions towards children,” he said in a statement. “With considerable personal sorrow, and thanks to all I have worked with in the party and more widely, I have now decided this is what I should do as soon as possible.”

The inquiry was based on two weeks of public hearings in March last year, including evidence from victims, police officers, members of the intelligence services, politicians and journalists.

Its report reserved particular criticism for what it described as a “political culture” based on deference toward holders of power, and “which values its reputation far higher than the fate of the children involved”.

However, the 173-page report found no evidence of an organised paedophile network at the heart of Westminster “in which persons of prominence conspired to pass children among themselves for the purpose of sexual abuse”, countering allegations brought to prominence by former Labour deputy leader Tom Watson.

“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,” said Professor Alexis Jay, chair of the inquiry. “A consistent pattern emerged of failures to put the welfare of children above political status.”

Prof Jay highlighted several specific cases, including those of Smith and Peter Morrison, who were both known to have an “active sexual interest” in children during the 1970s and 1980s. Morrison later went on to become Margaret Thatcher’s parliamentary private secretary and receive a knighthood.

The National Society for the Prevention of Cruelty to Children said that the IICSA report “shines a light on Westminster and highlights how for decades a desire to protect political reputations and maintain positions of power took priority over the protection of children”.

The charity added: “This is unacceptable. All political parties and institutions must create a culture where children’s safety is a top priority and anyone and everyone is prepared to come forward and share their concerns if they feel a young person is at risk, no matter the fallout.”

The report also investigated the Paedophile Information Exchange, known as PIE, which in the 1970s campaigned to lower the age of consent and for public acceptance of paedophilia, with the support of several high-profile figures.

More recently, in 2017 Green Party candidate Aimee Challenor hired her father David as an election agent, despite the fact he had been charged with assaulting a child and was later convicted.

The report focused on structural failings rather than individual transgressions. Wealth and social status were instrumental in protecting perpetrators of abuse, while victims who were poorer and did not have access to networks were ignored, it said.

It recommended that all political parties and institutions put in place robust safeguarding policies. Neither the Conservative party, Plaid Cymru, Ukip nor the Co-operative party had proper safeguarding measures in place, the report found.

The inquiry is one of 15 separate probes by IICSA, which was set up in 2014 by the then home secretary Theresa May following high-profile cases of historic child abuse.

Other investigations by the independent body include allegations of abuse in schools, online and in child migration programmes.

“We hope this report and its recommendations will lead political institutions to prioritise the needs and safety of vulnerable children,” said Prof Jay.

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