In just a week, Lady Butler-Sloss, Theresa May's choice to chair the inquiry into historical child sex abuse, has been swept aside by a media tide of allegations of personal conflicts of interest.

When the home secretary first announced her appointment in the Commons only last Monday it had seemed there were few people more qualified than the retired appeal court judge, who had been the highest-ranking female judge in Britain and the president of the family division, and had chaired the Cleveland inquiry into child abuse.

May had made clear that as far as she was concerned the inquiry was not being set up to replicate a police investigation into claims of a child sex ring at Westminster. Instead she said its job was to consider whether public bodies such as the NHS, the BBC and non-state institutions such as the churches "had taken seriously their duty of care to protect children from sexual abuse".

It was widely expected that Butler-Sloss, 80, would convene a panel of legal and child protection experts, and come up with recommendations on child policy to ensure that a Jimmy Savile or a Stuart Hall could not get away with what they did for so long ever again.

The idea was that Butler-Sloss would review the documentary evidence from the myriad recent official inquiries into child abuse across the country rather than interview witnesses who might themselves still be subject to criminal investigations.

But May also opened the door to a different kind of inquiry, saying that if Butler-Sloss deemed it necessary the government was prepared to convert it into a full public inquiry in line with the Public Inquiries Act 2005.

This immediately raised expectations among victims' groups and media organisations that not only would the voices of victims who continue to suffer from sexual abuse inflicted on them 20 or 30 years ago be heard, but their allegations would be taken seriously.

May said such cases would be passed immediately to the police and prosecuting authorities to continue again. But the door had been opened to the idea that the inquiry would examine again those allegations that the police and prosecutors had already rejected – including the rumours of Westminster paedophile ring.

The emergence of the fact that Butler-Sloss's brother was Lord Havers, who as attorney general in the 1980s had been responsible for some of the decisions not to prosecute, undermined her credibility but should not have proved fatal if she was only looking at the current institutional response to child abuse.

However, the subsequent disclosure that she herself had had the name of a bishop allegedly involved in child abuse withdrawn from her 2011 report into abuse in the Church of England was to prove fatal.

As she herself put it: "This is a victim-orientated inquiry and those who wish to be heard must have confidence that the members of the panel will pay proper regard to their concerns and give appropriate advice to government."

The home secretary is going to have a tough job finding a suitable replacement.