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The German government has announced it will finally open its files on a cult set up in Chile by a Nazi paedophile.

The move will shed light on Colonia Dignidad, a commune founded in 1961 by convicted paedophile Paul Schaefer and other German immigrants in a remote part of Chile.

Foreign Minister Frank-Walter Steinmeier made the incredible announcement as the ministry screened a movie about the sect starring Harry Potter actress Emma Watson and Inglourious Basterds actor Daniel Bruehl.

The abuse and slavery that victims of the sect endured only came to light after the fall of Pinochet's regime.

Schäefer was born in Troisdorf, Germany, and joined the Hitler Youth movement before serving as a medic during World War II.

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(Image: Rex)

After the war he fled to Chile and set up the secretive sect on a commune, which had 300 German and Chilean residents at its height.

It even emerged that Pinochet’s secret police used the Colonia Dignidad compounds to torture dissidents - and some members of the group joined in the interrogations.

In 1997 Schaefer fled Chile, but was arrested in Argentina in 2005 and shipped back to Chile to face trial for sexual abuse of children, arms possession and human rights violations.

He died in a Chilean jail in 2010.

The handling of Colonia Dignidad was not a glorious chapter of the history of the foreign ministry," said Mr Steinmeier.

"For many years, from the 60s to the 80s, German diplomats looked the other way, and did too little to protect their citizens in this commune."