Prime Minister Theresa May is under mounting pressure after it emerged that she was aware of concerns about the leadership of a high-profile child sexual abuse inquiry while still Home Secretary

The Conservative leader yesterday admitted that she had heard “rumours”, but insisted that it would have been wrong to act on “suspicion and hearsay”.

She also dodged questions about when she first knew of problems at the beleaguered inquiry for England and Wales.

READ MORE: May warned closing Fort George would be a 'betrayal' of Black Watch

Hours later No 10 admitted that it had been while she was still at the Home Office.

No action was taken until weeks later after official allegations had been made to the department.

Within days the women in charge of the inquiry, Dame Lowell Goddard, had quit.

Ministers have been accused of a cover up after MPs were initially told that the New Zealander had left because she was lonely and homesick.

READ MORE: MPs clash over EU nationals as 'bargaining chips'

Earlier this month week explosive reports emerged against the judge, including claims that she used racist language.

Dame Lowell has strongly denied allegations against her describing them as "falsities", "malicious" and part of a "vicious campaign" against her.

Mrs May, who was the Home Secretary until this summer, set up the inquiry, which has been dogged by controversies and is now on its fourth chair in its two-year lifespan.

READ MORE: How the Prime Minister has Commons in stitches with a double entendre

In the Commons Labour MP Lisa Nandy challenged the Prime Minister to say exactly when she became aware of problems with Dame Lowell’s leadership.

Mrs May told her that she had had a duty to uphold the independence of the probe.

She added: “There were stories around about the inquiry, and about individuals related to the inquiry.

“But the Home Secretary cannot intervene on the basis of suspicion, rumour or hearsay.”

Earlier this week Mark Sedwill, the most senior civil servant in the Home Office, insisted he and Mrs May were unaware of “tensions” on the panel until 29 July, shortly before Dame Lowell quit.

READ MORE: Theresa May refuses to guarantee UK made missiles not responsible for civilian deaths in Yemen

But No 10 confirmed that Mrs May had heard of problems “some weeks” before July, while she was still the Home Secretary.

However, sources insisted that she had only been aware that there were “tensions”.

They denied that the Prime Minister had been aware of the reasons behind the tensions.

Ms Nandy said that the Prime Minister had to explain what exactly she knew and when.

"Theresa May set up the abuse inquiry and appointed its chair. She was the home secretary in April when serious concerns were raised with her department, and only she had the power to act on them," she said.

"She suggested that she did know of problems but did nothing at all. For this investigation to regain the trust of survivors the Prime Minister must now come clean about what she knew when, and why she failed to intervene."

READ MORE: May warned closing Fort George would be a 'betrayal' of Black Watch

The new inquiry chairwoman, Professor Alexis Jay, told MPs that it "was clear from the beginning that Lowell Goddard really would have preferred to sit on her own without the assistance of a panel".

Scotland has a separate child abuse inquiry, which has cost taxpayers more than £2.5million in the last year.

Lady Anne Smith, the probe's new chairman, was appointed to head the troubled inquiry in July following the resignation of the previous chairman, Susan O'Brien QC.

The inquiry has also lost a panel member Professor Michael Lamb, who quit a week before Miss O'Brien citing 'interference' from the Scottish Government.

The SNP Government said that it 'entirely' rejected his claims.