The Government's inquiry into historic child sex abuse was thrown into disarray today after the ex-judge chosen to lead a wide-ranging inquiry dramatically quit - leaving the Home Secretary Theresa May facing questions over her judgement.

Baroness Butler-Sloss said she had not 'sufficiently considered' concerns that her brother Michael Havers sat in the Cabinet during the 1980s - the period on which claims of a cover-up are focussed.

Mrs May this afternoon admitted to MPs that she was not aware that the late Conservative Attorney General had allegedly attempted to stop an MP airing paedophile allegations in Parliament.

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Theresa May's judgement was called into question today, after Lady Butler-Sloss resigned from the child abuse inquiry

Home Affairs Select Committee Chairman Keith Vaz said Lady Butler-Sloss's integrity was not under question

Baroness Butler-Sloss has resigned from the child abuse inquiry less than a week after her appointment

Baroness Butler Sloss's resignation comes less than a week after David Cameron agreed to an inquiry into allegations that politicians, the police, the judiciary, celebrities, the BBC, the NHS and the Church conspired to cover-up abuse over several decades.

Mrs May this afternoon told the Home Affairs Select Committee that she stood by her decision to appoint the former judge to head up the inquiry.

She said she was aware of 'number of issues' raised in the past about Baroness Butler Sloss' brother, but not the revelation that he had tried to stop whistleblowing MP Geoffrey Dickinson from making allegations of child sex abuse in Parliament.

She said: 'This is an issue that surfaced in the last few says.'

But Mrs May insisted that Baroness Butler-Sloss was the right choice to lead the inquiry and said her integrity was beyond question.

The Home Affairs Select Committee chairman Keith Vaz said: 'It is your judgement in not doing due diligence that has led to the resignation of someone of great integrity today.

'No-one is questioning her integrity. It is your judgement we are questioning.'

Mr Vaz added: 'The last few weeks has been somewhat shambolic.'

Earlier Downing Street had stressed it was 'entirely' Baroness Butler-Sloss's decision to quit the role, which was only announced last Tuesday.

Baroness Butler-Sloss, 80, spoke to Home Secretary Theresa May to explain her reasons for quitting.

In a statement, she admitted that she 'did not sufficiently consider' whether her family links would cause difficulties in the inquiry.

Lady Butler-Sloss said: 'It has become apparent over the last few days, however, that there is a widespread perception, particularly among victim and survivor groups, that I am not the right person to chair the inquiry.

'Having listened to the concerns of victim and survivor groups and the criticisms of MPs and the media, I have come to the conclusion that I should not chair this inquiry and have so informed the Home Secretary.'

Her brother Sir Michael Havers sat in the Cabinet as attorney general from 1979-87

Mr Cameron's official spokesman said: 'While understanding and respecting her decision, the government's view has not changed.

'The Government's view hasn't changed, that she would have done a first-class job as chair.

'The reasons for her appointment still absolutely stand in terms of her professional expertise and her integrity, which I don't think has been questioned from any quarter whatsoever, and rightly so.'

'There is an important task here in terms of having the over-arching inquiry and we will put a panel together that ensures that that that job is done comprehensively.

'The key thing around the appointment will be getting a panel that has the right range of skills and expertise and credibility that gives the inquiry confidence in its work.'

Lady Butler-Sloss is a former president of the Family Division of the High Court and sits in the Lords as a cross-bencher.

Her brother, Lord Havers, was attorney general and later Lord Chancellor from 1979-1987, the period in which much of the alleged abuse is said to have taken place.

He sat in the Cabinet in 1983, when then-Home Secretary Leon Brittan was handed a dossier by Tory MP Geoffrey Dickens.

Sir Michael was accused of a 'cover-up' in the early 1980s over a refusal to prosecute Foreign Office diplomat Sir Peter Hayman, who was a member of the Paedophile Information Exchange.

Sir Michael, who died in 1992, is said to have had a 20 minute argument outside the Commons chamber with Tory MP Geoffrey Dickens in the 1980s in an attempt to stop him using parliamentary privilege to name diplomat Sir Peter as a paedophile.

Claims also emerged at the weekend that Baroness Butler-Sloss had excluded allegations of abuse made by a choirboy in order to protect the Church of England.

Mrs May responded: 'I am deeply saddened by Baroness Butler-Sloss's decision to withdraw but understand and respect her reasons.

'Baroness Butler-Sloss is a woman of the highest integrity and compassion and continues to have an enormous contribution to make to public life.

'As she has said herself, the work of this inquiry is more important than any individual and an announcement will be made on who will take over the chairmanship and membership of the panel as soon as possible so this important work can move forward.'

Home Secretary Theresa May said she was 'deeply saddened' by Baroness Butler-Sloss's resignation, hailing her as being of the 'highest integrity and compassion'

WHO WILL TAKE ON THIS CONTROVERSIAL ROLE NOW? Downing Street must now begin the hunt for a new chairman of the inquiry, less than a week after deciding Baroness Butler-Sloss was the right person for the job. Ministers had hoped to start naming the other members of the inquiry panel within days. The timescale is tight, because Home Secretary Theresa May expects an interim report to be published before the general election. Now the whole process has gone back to square one. A major headache for the government is almost any senior figure - former judges, police officers, politicians or clerics - risk being seen as part of the Establishment accused of a cover-up. No decision will now be made on the membership of the panel, or even the terms of reference, until a new chairman has been appointed. Asked whether the Government would now be looking for an inquiry chair who was not identified so closely with the establishment, the Prime Minister's official spokesman said: 'The key thing around appointments will be getting a panel that has the right range of skills and expertise and credibility that gives and inspires confidence in it and its work.' Advertisement

Bizarrely, Downing Street would not say whether Sir Michael's position was considered before giving the job to his sister.

'I don't think it was a particularly public secret,' Mr Cameron's spokesman said.

'The Government looked at the full range of ways in which she was a highly credible person to take up this role.

'The key points were her expertise and the ground-breaking work she did around the Cleveland inquiry.'

However, criticism of Baroness Butler-Sloss's family connections has mounted in the last week.

Today Vera Baird, a former Labour MP and solicitor general, told BBC Radio 4's Today programme: 'If she were in a court case, presiding over it and her brother were mentioned as somebody who she may have to investigate as to her role, she would of course withdraw due to a conflict of interest.

'And the conflict is even bigger here where we have a vulnerable community of people who say that they have been not allowed to get justice.

'It is her past to look into it. It’s got to be done by somebody who is an outsider to this, who is completely independent. And without wanting to descend totally to cliche, justice must not only be done, but it has to be seen to be done.'

Conservative Sarah Wollaston, who chairs the Commons health select committee, said she did not doubt the peer's integrity but it was 'hard to see why Baroness Butler-Sloss would want to accept a role so many regard as conflicted at the outset'.

MP Simon Danczuk claimed she was 'part of the establishment' and concerns about her brother were 'too close for comfort'.

Today he said she had made the 'right decision' because she had a 'number of conflicts of interest'.

'Baroness Butler-Sloss was just not the appropriate person to chair it. I questioned the logic of having someone who was so well-connected with the Establishment,' he told Sky News.

Labour MP Keith Vaz, chairman of the home affairs select committee, last week questioned the Government's decision to choose a Member of the House of Lords 'no matter how distinguished to head the inquiry'.

He raised the issue with Home Office permanent secretary Mark Sedwill last week.

Today he said: 'I am not surprised by this decision - it is the right one.

'As I pointed out to Mr Sedwill, the public would be concerned that a member of Parliament, no matter how distinguished, had been appointed to head this important panel.

It has become apparent over the last few days that there is a widespread perception, particularly among victim and survivor groups, that I am not the right person to chair the inquiry Baroness Butler-Sloss

'The whole inquiry process is becoming shambolic: missing files, ministers refusing to read reports and now the chair resigning before the inquiry has even commenced.'

Solicitor Alison Millar, head of the abuse team at law firm Leigh Day which is representing alleged victims of assaults in institutions linked to the inquiry, said: 'Our clients are pleased and we are relieved that Lady Butler-Sloss has taken this decision to stand down. This was the only sensible decision to ensure that survivors and the public could feel confident that the inquiry was not going to be jeopardised by accusations of bias.

'The issue was never the integrity of Lady Butler-Sloss or what she knew of her brother's actions as the chief legal adviser to the Government, it was always the fact that she would ultimately have to judge those actions.

'This would never have been acceptable for an inquiry which requires not only to be transparent but to be seen as such by those who have in the past been so badly failed by the establishment.'

Labour MP Tom Watson, who raised the allegations of historic child abuse in the Commons two years ago, said Lady Butler-Sloss had done 'the right thing'.

'She has the highest integrity. She would know that any controversy around her as chair of the inquiry would cause difficulties, particularly with very vulnerable survivors who are nervous of speaking out,' he told BBC News.

'They need to be encouraged to do so and any question mark over the inquiry would have been difficult. I think it is testament to her own integrity that she had made that decision herself.'