Inquiry told Thatcher was probably aware of concerns about Cyril Smith

An independent inquiry into child sexual abuse has been told former Prime Minister Margaret Thatcher was probably aware of concerns about the Rochdale MP Cyril Smith when he was given a knighthood in 1988.

The inquiry has begun to look into the allegations of attacks on boys by Smith and others at two residential schools in Rochdale, Knowl View and Cambridge House. The lead counsel, Lord Altman's told the inquiry about a letter which was sent to Mrs Thatcher's office telling of concerns over allegations about Smith who was the Liberal MP for Rochdale at the time.

While it is not clear whether the prime minister received this letter, another letter enclosing the coverage is believed to have been sent to her private secretary in May 1988.

Mr Altman told the inquiry: "I mention this knighthood here for two reasons. First, because it demonstrates that the Lancashire investigation and the RAP article had been considered at the very highest level of politics and seemingly did not prompt more than consideration of the DPP's decision not to prosecute.

"Second, because it is important to bear in mind the extent to which Cyril Smith continued to involve himself in serious issues related to the welfare of children.

" A knighthood would only have reinforced Smith's veneer of respectability and power.

"By way of example, records from a case in 1991 show that he played a pivotal role the removal of a child from his family home.

"The child in question had behaved sexually towards his eight-year- old sister.

"Rochdale social services were attempting to manage this situation but it is quite clear that it was the involvement of Smith in his capacity as the local MP that was decisive."