It is thought the probe will cover allegations of abuse at care homes and education institutions as well as by religious orders, by what are said to be high profile members of the establishment.
The Scottish Government has come under intense pressure to order an inquiry – with Scotland now the only part of the UK without such a review.
There were renewed calls for action yesterday after two leading charities claimed that children north of the Border have been the victims of satanic abuse including rape, murder and even the production of so-called snuff films, which depict killings.
One campaigner said he had heard of babies born but never registered, so they would not be missed when killed by secret paedophile networks.
Education Secretary Mike Russell is tomorrow expected to make a statement to Holyrood on child protection and will mention the issue of historical abuse.
While he is not expected to make an official announcement of an inquiry it is understood talks are taking place behind the scenes, with an investigation expected to be ordered within months.
It is thought the Government is taking its time to establish the precise nature of the inquiry and ministers are deliberating in order to avoid the problems that have plagued a similar investigation south of the Border.
UK Government ministers have been left red-faced after two women appointed to chair their inquiry – Baroness Butler-Sloss and Fiona Woolf – were forced to stand down due to alleged conflicts of interest.
Scottish Labour’s justice spokesman, Graeme Pearson, said he hoped an inquiry would be launched as soon as possible.
He added: “I think the pressure has become significant and events elsewhere in the UK means that this needs to be done to clear the air. I just don’t know why the government has been dallying so long.”
Many incidents took place years ago but experts are sure ritual abuse rings still operate.
Police Scotland said they were taking the allegations of snuff films and widespread ritual abuse “incredibly seriously” and would investigate any complaints.
Kate Short, of Kilmarnock-based Break The Silence, said: “We have had quite a lot of people who have been abused as part of a cult or a paedophile ring.
“In the worst cases they have been forced to watch the making of snuff movies. It’s the extreme, barbaric type of terror that can lead to serious personal disorder.”
Charity Izzy’s Promise is based in Dundee. Project co-ordinator Joseph Lumbasi said: “Babies are aborted for sacrifices.
“There is pornography, sick films. Horrific things are happening and nobody is getting caught.”
I sincerely hope and pray that if there is such Satanic ritual abuse happening, that it will be found out. If they exist, these people cover their tracks very well.
Accusations of Satanic ritual abuse has been associated with an alleged pedophile ring operating in Holland involving Dutch police and the Ministry of Justice up to its highest level. Read: DEMI AND NIRVANA; CHILD ABUSE RING