She made the comments as the government announced new reforms that aim to better protect youngsters who reside in the country's 455 children's homes.
The action comes following a report published by Ms Berelowitz, which was ordered after the jailing of a sex abuse ring in May which preyed on vulnerable girls in Rochdale. Only one of the girls was in care at the time of the abuse but all were known to social services at some point in their childhood.
The ongoing inquiry has highlighted evidence that children in care are particularly vulnerable to child sex exploitation, with some residential homes being specifically targeted by abusers.Ms Berelowitz said her research found perpetrators come from all ethnic groups, as do their victims, who are as young as 11 and are largely but not exclusively girls.
Speaking alongside Children's Minister Tim Loughton as he announced the new measures, she said of the abuse: "It is of a violent and sadistic nature. I've been in the children's services field for a very long time, and I have never come across the scale of violence and sadism that I'm encountering now. The stories that children and young people tell us are truly horrific."
"I think it's quite right and proper that the Government is paying special attention to this group of children as the state is their parent and therefore we have a special duty of care to children who are under care orders of one kind or another."
A spokesman for Ofsted welcomed the government's commitment to reform, adding that its own inspections of children's homes were constantly reviewed.
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