Prime Minister Julia Gillard has announced the creation of a national royal commission into institutional responses to instances of child sexual abuse.

The decision was taken at a meeting of federal cabinet this afternoon.

Ms Gillard had been under pressure to act following growing calls for a national inquiry into explosive allegations by a senior New South Wales police investigator that the Catholic Church covered up evidence involving paedophile priests.

A number of senior Labor MPs, as well as key independents, had already voiced their support for action on a national scale.

Opposition Leader Tony Abbott also declared his support for a "wide-ranging" royal commission into child sex abuse but said it should not just focus on claims involving the Catholic Church.

Ms Gillard said the Government would take the coming weeks to consult stakeholders before announcing the terms of reference.

The Prime Minister said the commission would look at all religious organisations, state care providers, not-for-profit bodies as well as the responses of child service agencies and the police.

"The allegations that have come to light recently about child sexual abuse have been heartbreaking," Ms Gillard told reporters in Canberra.


"These are insidious, evil acts to which no child should be subject.

"Australians know... that too many children have suffered child abuse, but have also seen other adults let them down - they've not only had their trust betrayed by the abuser but other adults who could have acted to assist them have failed to do so.

"There have been too many revelations of adults who have averted their eyes from this evil.

"I believe in these circumstances that it's appropriate for there to be a national response through a royal commission."

Ms Gillard said she would speak with relevant premiers and chief ministers in the coming days to discuss how the royal commission would relate to any similar inquiries proposed or underway.

"Discussions will also take place with victims' groups, religious leaders and community organisations," she said.

"Further announcements, including the proposed commissioner and detailed terms of reference, will be made in coming weeks.

"I commend the victims involved for having the courage to speak out.

"I believe we must do everything we can to make sure that what has happened in the past is never allowed to happen again."