The investigation, one of the biggest child abuse investigations in Britain, saw 22 police officers making inquiries at 46 children's homes in Clwyd and 17 in Gwynedd. The homes were under the supervision of social services departments.
Mr Owen said an inquiry was necessary to 'closely examine the areas of responsibility at both political and professional levels'.
His move surprised many people in North Wales, as he had rejected earlier advice that an outside police force should be brought in to oversee his own officers' investigation.
The advice, from Donald Elliott, HM Inspector of Constabulary, was aimed at dispelling local disquiet about the objectivity of the police investigation. Allegations had been made against one serving and two former police officers, but a decision was taken not to prosecute, reportedly because of insufficient evidence.
The Welsh Office has already promised a full public inquiry into the scandal, which has been described as 'the biggest failure to protect children in British history'.
The investigation began in August 1991 and was headed by Det Supt Peter Ackerley. Last month the North Wales police authority was told that 5,256 separate lines of inquiry had been followed up and 3,231 statements recorded.
Bryn Estyn children's home near Wrexham, scene of most of the alleged sex abuse, closed in 1984.
The Crown Prosecution Service said all files in the case had been considered and advice given. A spokeswoman said trials were pending against four people.
Two people have already been convicted on charges resulting from the investigation. One person was acquitted.Reuse content