At 10.30 on Tuesday morning, in the Flintshire County Council offices in Ewloe, a small North Wales village near Mold, Sir Ronald Waterhouse, a retired High Court judge, will open the long awaited Tribunal of Inquiry into Child Abuse in North Wales.

The Clwyd inquiry, as it will be known, will hear the grim story of years of sexual and physical assault endured by hundreds of boys and young men in children's homes in the former Welsh counties of Clwyd and Gwynedd. Besides investigating how the abuse could have gone on for a decade and more without being stopped by council officials, the social service inspectorate, the Welsh Office, and most significantly, North Wales police, the inquiry is likely to hear claims that the abuse was systematic and organised by a national paedophile ring perhaps involving well-known public figures.

Alison Taylor now has a reputation as a novelist, but in the mid- 1980s she was the manager of a children's home in Gwynedd. It was there that she first heard tales of abuse from children who had been transferred from other homes in North Wales. Convinced that this was not fiction, Ms Taylor raised the issue with her superiors. Then in 1986, after nothing happened, she went to North Wales police with a series of allegations.

An inquiry was begun but ground to a halt; and all Ms Taylor got for her pains was the sack, on grounds described as "a breakdown in communication with colleagues". She sued Gwynedd for unfair dismissal and they settled out of court and paid her costs.

"I think there was an expectation that I would go away, but I didn't," she says. "I felt released from my obligations. But when I went to the Welsh Office, they didn't want to know; nor did the DSS, or the social services inspectorate. Early in 1991, I decided to put together all the information I had. Since getting the sack I had received allegations from well over 100 young people who had been abused while in care, and in the end I had a hefty dossier."

That was the dossier she took to the Shire Hall in Mold on a wet Monday evening in May 1991. The rest of the council building in the North Wales market town was deserted, but the occupants of the first-floor office near the council chamber were engrossed in a discussion that led to the exposure of a scandal unprecedented in the history of child care in Britain.

The four men in the room had been presented by Ms Taylor with startling allegations of widespread and serious child abuse - principally sexual assault on boys and young men - by staff in children's homes in their own county, Clwyd.

"We did not know who was involved, but from what we heard we concluded that there was a hell of a stink coming from one home in particular," said Malcolm King, who was then the newly-appointed chairman of Clwyd's social services committee. Also at the meeting were Dennis Parry, the council leader, John Jevons, the director of social services, and Andrew Loveridge, the council lawyer .

Although persuaded that there was a case to answer, they resolved not to approach North Wales police at once: "We decided to seize the relevant council files and for John to hold them. They were personnel and other files relating to homes. We had to do it secretly. At that stage we did not know who we could trust," said Mr King.

"After a month we had a lot more material. I had done some amateur sleuthing, and I will always remember talking to one young guy in a pub about his experiences and his dad overheard. He said, "I was in that home too. I thought everybody knew what went on. When I was there the master had his pick, then the deputy and so on."

Only then were the police brought in: a letter from the Clwyd county secretary raised the possibility of a paedophile ring in North Wales. It also contained a background briefing, a list of convictions to date, a list of admissions of gross professional misconduct, a list of suspicions, and a list of named individuals about whom questions had been raised: 25 people were named in all. North Wales police began a major investigation.

A squad of 30 detectives spent three years on the child abuse inquiry. By the time it was over its index contained the details of 4,580 individuals, a total of 6,071 specific inquires had been carried out and 3,755 separate witness statements had been taken.

All 46 children's homes in Clwyd and 17 in Gwynedd were investigated, with special emphasis on seven of them and, in the end, particular concentration on two: Bryn Estyn, a council home, and privately-run Bryn Alyn, both situated in large country houses near Wrexham. It became clear that both had been centres of paedophile activity.

For all that, there was no cascade of criminal indictments. Eight men were charged, and seven convicted of child abuse. They included the deputy head of Bryn Estyn, Peter Howarth, jailed for 10 years in July 1994 for sexual assaults on eight boys at the home, and John Allen, proprietor of Bryn Alyn, jailed for six years in February 1995 for six offences of indecent assault against boys in his care.

This small string of prosecutions received no national publicity, but it did leave many members of the Clwyd council feeling that more questions had been raised than answered.

It was unclear, for example, just how many cases had been forwarded to the Crown Prosecution Service. Some sources put it as high as 300.

Although it was known that a number of North Wales police officers and other professionals had been accused of participating in the child abuse, none had been prosecuted.

There were persistent rumours that the abuse had been organised and systematic and had spread far wider than North Wales. Boys from the homes were said to have been supplied to a paedophile ring that extended as far as London and the south coast, and prominent public figures were named as clients.

And the full role of John Allen, proprietor of Bryn Alyn, was left unexamined.

Bryn Alyn, founded in 1968, promoted itself vigorously at national and international child-care conferences; local authorities all over the country sent children in care to Bryn Allen, and in time it expanded to include three more residential homes, two in Clwyd and one in Shropshire.

Mr Justice Curtis, when passing sentence in 1995, said Allen was "driven by homosexual lust", but there was money in the homes too. At the height of his success, John Allen was estimated to be worth more than pounds 7m.

This, however, was a remarkable sum to have amassed from child care alone. Allen had built up a string of companies, including two video production firms, Cambralynn, Ltd, and Video People, Ltd. In the late 1980s he took over the management of the Poyser Arts Centre, housed in a converted chapel in Wrexham. He set up a new video company, Poyser Arts Centre, Ltd, and received European Union and regional development grants to install state- of-the-art video facilities.

Another unresolved mystery surrounds a fire in a flat in Brighton which killed five people in April 1992. It broke out in the third-floor flat in Palmeira Avenue, Hove, during a Saturday-night party attended by about 20 people, drawn mostly from the town's gay community.

Several former Clwyd children's home residents are thought to have been among the guests: two who have been positively identified had been Bryn Alyn residents and knew John Allen very well - Adrian Johns

and his brother Lee (also known as Lee Homberg).

Adrian Johns died and Lee Johns (found dead in 1995 after testifying in John Allen's trial) was badly injured in the blaze, which another party guest, Trevor Carrington, a former airline steward, admitted starting as a prank. (He himself committed suicide shortly afterwards.) Rumours continue to circulate about the fire, although at the time a link with the Clwyd scandal was not made.

But the unanswered questions and the seriousness of the breakdown in care had left those most concerned with the affair - the men who first heard Ms Taylor's story in the Shall Hall in 1991 - feeling strongly that a full inquiry was needed.

Consequently, the county council commissioned its own report in 1993 from three leading independent child-care experts - John Jillings, former social services director for Derbyshire, Professor Jane Tunstall of Keele University, and Gerrilyn Smith, an American child-care expert formerly of the Hospital for Sick Children, Great Ormond Street.

Mr Jillings and his colleagues were astonished by what they found. It was not a new problem: there had already been 10 internal inquires, none of them published.

"We identified 10 investigations into problems within Clwyd residential service or foster care since the early 1970s of which seven involved specific homes," they wrote. "Over the period 1974 to date an alarming number of disciplinaries - 51 - and convictions - 13 - have come to our attention.

"The history of allegations of serious abuse of children by staff was frankly appalling in its extent and persistence down the years."

Their own report, completed in March last year, was damning. The abuse of children and young people in Clwyd residential establishments had been extensive and widespread, it said, and the agencies who should have stopped it, in particular the Welsh Office social services inspectorate, had singularly failed to do so.

It raised the issue of alleged police involvement in the abuse that had gone on. "Of the many statements taken in the police investigation it is unclear how many were forwarded to the Crown Prosecution Service for consideration," the report said. "It is also unclear how many other professionals, including police officers, were named in these statements as perpetrators."

North Wales police, the team revealed, had rejected persistent pressure from the county council and from HM Inspectorate of Constabulary to appoint an outside force to look into the accusations made against some of their own serving and retired officers.

The most sinister implications of the affair, they said, demanded further action: a full public inquiry.

"Concern has been expressed in Clwyd over the possibility of links between some of the abusers as well as the possibility of a paedophile ring," they wrote. "While it was recognised that this panel of inquiry did not have the necessary power to investigate these matters, the county council has throughout been in favour of a major public inquiry to be initiated by the Welsh Office, including within its remit the task of considering possible links between paedophiles."

Furthermore, they said, only a body such as a full public judicial inquiry would have the resources and authority to investigate "the suggestion that public figures may have been involved in the abuse of young people in Clwyd."

Yet the Jillings report was not published. The reason was that the Municipal Mutual, the council's insurers, complained that it might open the floodgates to claims for compensation from the victims, and threatened to withdraw the council's cover.

On 26 March last year, in almost its final act as a public body - Clwyd ceased to exist in the reorganisation of Welsh local government on 1 April - the county council voted for the Jillings report to remain under lock and key, and the team were ordered to hand back their personal copies.

It remains officially suppressed, but in April extracts from the report were published exclusively in the Independent on Sunday. For the first time the true scale of the Clwyd scandal became apparent, and the pressure for a public inquiry began.

There was no immediate sign of agreement from William Hague, the Welsh Secretary, and Stephen Dorrell, the Health Secretary.

But on 9 June the Independent on Sunday revealed the scandal of child abuse in Cheshire, Clwyd's neighbouring county, where police have traced 2,500 former residents of children's homes and found 300 cases of alleged abuse. This put the spotlight back on Clwyd itself.

At the cabinet meeting the following Thursday morning, 13 June, Prime Minister John Major personally insisted on an inquiry, not least because the Welsh Conservative Conference was due at the weekend. He announced it himself later that day.

And now at last, on Tuesday in Ewloe, Sir Ronald Waterhouse will preside over a remarkable event: the official opening of a can of worms. Those who have pressed for the inquiry for so long know that it will be unpleasant and indeed horrific, and likely to shock the whole country.

But they are hoping that it will uncover the truth. No matter that it deals with events that went on years ago behind closed doors in little- known institutions. The misery and corruption it catalogues will make it long remembered.