The wide-ranging independent inquiry will decide whether the risk of death and injury in the ring is justified in the light of the benefits of getting youngsters off the streets and perhaps their only chance of "making good".
It will also examine whether boxing can be made safer and whether a sport that allows one contestant to beat the other senseless can be justified in a civilised society.
If not, it will call on Parliament to outlaw the sport.
Unlike previous inquiries, which were criticised and largely ignored because they were set up either by doctors or boxing bodies, the new inquiry combines for the first time both medical and sporting expertise. Its members know the sport, its rules and regulations, as well as the injury implications.
It is being led by Professor Greg McLatchie, medical director of the National Sports Medicine Institute, and Professor John Davies, chairman of the sports committee of the Medical Commission on Accident Prevention at the Royal College of Surgeons. It is backed by Sir Roger Bannister and other leading sports figures.
Professor McLatchie, a former amateur boxing champion and karate blackbelt who survived the ring to become a surgeon, said: "We will be looking at whether it is acceptable to have a sport where under the rules you can hit the head and render a man senseless.
"Is the sport legal? Can you give legal consent to going in the ring and being killed? Is it ethical for doctors to assist at the ringside or should they refuse to take part as they do already in the case of torture?"
Professor McLatchie said the enquiry would consider ways of making boxing safer such as giving ringside doctors the power to stop a fight over the head of the referee. It would also look at the possibility of banning blows to the head and whether the boxing public would accept this. The sociological consequences of banning the sport completely would also be examined.
"There is no doubt that there is a risk of dying or suffering brain or eye damage in the ring, but we need to weigh those risks against the social benefits," said Prof McLatchie. "Most boxers come from working-class backgrounds and boxing is a way out of a very hard life.
"It gives them self-respect and discipline. A lot of young boxers behave very responsibly in society - which cannot be said for all footballers."
Professor Davies, the doctor to the Welsh Rugby Union who successfully changed the rules of rugby to reduce the chances of foul play, said: "We shall be meeting in the next couple of weeks to decide the exact remit of our enquiry. We want to look at all aspects of boxing, not just the medical risks. We will consider what would happen if boxing were banned. Would it simply go underground?"
Prof Davies said the next inquiry was vital in the light of the number of boxers dying and being seriously injured in the ring. There have been 14 deaths in 25 years and we are also witnessing catastrophic injuries. Due to improved medical attention lives are being saved but boxers are being left paraplegic.
"At the end of the day, it is up to the Boxing Board of Control to decide what happens but I don't think the public is going to wear the status quo much longer if it means boxers are left brain damaged."
The inquiry will call evidence from neurologists, ethicists, psychologists and sociologists, and make recommendations by the end of the year. It is independent of the British Medical Association which carried out its own investigation into the sport in the 1980s and recommended a ban on professional boxing.
Prof Davies said: "It is our view that it would be more appropriate for the BMA to provide evidence to this inquiry rather than be a part of it - the BMA will be in the dock as well."