Home Secretary Yvette Cooper in January said that the Government would provide £5 million to support Telford-style local probes.

But Home Office minister Jess Phillips said that “following feedback” the Government would adopt a “flexible approach” where the money would be available for local councils to use as they wished to support grooming gang work.

She said that this could mean full independent local inquiries, but could also include “more bespoke work, including local victims’ panels or locally led audits of the handling of historical cases”.

Sir Trevor Phillips, former chair of the Equality and Human Rights Commission, told Times Radio: “I think what the Government is doing on this question is utterly, utterly shameful.

“It is so obviously political, that if people, who are in Government who are really decent people, should be ashamed of themselves.

“It is so obvious they are not doing this because of the demographic of the people involved, largely Pakistani/Muslim background and also in Labour-held seats and councils who would be offended by it.

“That is clearly the reason they are not pursuing this, and it is utterly shameful, given what has been done to these children by these men.

“I cannot tell you how cross I am about it.”

Home Office sources insisted that the change announced by Ms Phillips on Tuesday did not necessarily mean that the five inquiries would not go ahead but rather ministers had decided to not be prescriptive following the local consultation.

They said: “The framework for local areas to be identified for inquiries will be set out shortly and will be informed by the Baroness Casey audit, which is looking at the scale, ethnicity and locations of grooming gangs exploitation across the country.

“Arrests for child sexual exploitation and grooming have increased in the last nine months and following our action with police forces, cases where no further action was previously taken are now being looked at again.

“This Government will leave no stone unturned for victims of child sexual abuse.”

A Home Office spokesman said it was “patently false” it was watering down its plans.

“The £5 million funding announced in January is being made available to local authorities to help strengthen local responses to child sexual exploitation, and all local authorities will be able to apply for funding for local inquiries or other work in this area,” the spokesman said.

“The Home Secretary has written to every local authority on our plans to support local inquiries, and after listening to local authorities about what they need, we made the decision to implement the fund in a flexible way.”

Ministers said Tom Crowther, a barrister who chaired the Telford inquiry into grooming gangs, had agreed to work with the Government to develop a new framework for victim-centred locally led inquiries where they were needed.

But Shadow Justice Secretary Robert Jenrick said: “More people were sentenced in Rotherham for the Summer riots than have been for the grooming gangs scandal.

“The authorities went after weekend rioters with greater energy than they have done for the perpetrators of decades long rape and sexual violence against vulnerable young girls.

“Two-tier Keir has called for inquiries on all manner of things, but somehow, not on this – the rape of young girls in at least 50 towns and cities across our country and which almost certainly continues to this day.

“Why? Because he’s squeamish about confronting hard truths – the overrepresentation of Pakistani men and the racially aggravated sexual assault and hatred shown towards young white girls.

“It’s shameful and the fight for justice must go on.”

Former Home Secretary James Cleverly said: “Months ago, the Labour Government rejected the Conservatives call for a national inquiry into rape gangs and announced a watered down version.

“Today, they wanted down their plan more.

“And did so on the last day before recess, when they knew the Commons chamber would be nearly empty.”