However, it is understood the dispute was the final straw and members have now decided to suspend all work until clarity over its future is given.

A statement on the inquiry website said: "The panel has made the difficult choice to delay all scheduled listening meetings until after the Home Secretary has made her decision on the future of the panel and has announced who will be appointed as Chair.

"The purpose of the listening meetings was for the panel to hear the views of victims and survivor organisations about the work and direction of the Inquiry.

"However, given the uncertainty over the future shape of the Inquiry, the panel feels that all upcoming listening meetings would not fulfil that intended aim.

"They also understand that for some victims and survivors the decision to attend a meeting might be both difficult and courageous, and did not think it appropriate to ask them to share their views about an Inquiry where there is a lack of certainty about its future shape."

The inquiry was set up by Mrs May in July to find out whether public bodies had neglected or covered up allegations of child sex abuse in the wake of claims paedophiles had operated in Westminster in the Eighties.

It has already been hit by the resignations of both Baroness Butler-Sloss and then Dame Fiona Woolf as the chairman after each became entangled in allegations of conflict of interest.

But the panel had, until now, been determined to continue the work until a new chairman was appointed.

The Home Secretary revealed in a letter last month that she was considering standing down the current panel in favour of a royal commission or a new inquiry on statutory terms.

On Tuesday Sharon Evans, a child abuse survivor, accused the inquiry’s lawyer, Ben Emmerson QC, of “overstepping the mark” including claims he had put pressure on how she should give evidence to a parliamentary committee.

Mrs Evans, chief executive of the Dotcom Children's Foundation, which helps prevent children from becoming victims of violence or abuse, told the home affairs select committee she felt "bullied and intimidated".

In a statement after the hearing Mr Emmerson claimed Mrs Evans had repeatedly disclosed confidential information from panel meetings and it was his duty to raise that with her.

He said the allegations of bullying and intimidation were “entirely baseless” and that his advice “was legally correct and entirely necessary in the circumstances”.

In a separate statement, the rest of the panel said it had “full confidence in the integrity, advice and impartiality of counsel to the Inquiry”.