The Taoiseach was speaking during a two-day debate on the report of the Commission to Inquire into Child Abuse in the house this morning.
Mr Cowen said the report has “radically changed” the public’s perception of what went on in the institutions and has “vindicated once and for all” former residents.
He said: “What it has revealed must be a source of the deepest shame to all of us.
“Children in the care of the state and in our care were physically emotionally and in many cases sexually abused and our State and its systems failed to hear their cries or come to their help.”
Mr Cowen said a plan to implement the commission’s two specific recommendations – to alleviate the effects of the abuse on the people who suffered and to protect children in care from abuse – would come before the Government by the end of next month.
Fine Gael leader Enda Kenny told the Dáil the “State itself was responsible for the destruction of life – it was responsible for the destruction of that most precious formative gift which is childhood.”
“We are as a country haunted by the great famine we wonder at the inhumanity shown to the starving a century and a half ago, we should all be haunted by what Ryan has disclosed because he has revealed a great famine of compassion, a plague of deliberate, relentless cruelty.”
Labour leader Eamon Gilmore said the report revealed for the first time the full extent of the abuses.
He said: “This sordid saga, this systematic abuse and neglect of children who were handed over by the State into the custody of religious institutions shocked Irish society to its core.
“This is not something that we can dismiss as something as simply an unfortunate relic of earlier decades.”
“Anyone who has met any of the individuals who has suffered in these institutions, anyone who has met the survivor groups, will understand that the abuses carried out in these institutions have left a terrible legacy of pain and suffering.”
The debate will continue tomorrow during a special sitting of the house. It was due to begin yesterday but was postponed to allow TDs to finish their debate on confidence in the Government.
Yesterday, thousands of people took part in a march of solidarity with the victims of abuse in Dublin.
Meanwhile, Catholic bishops expressed shame and repentance over “a culture that was prevalent in the Catholic Church in Ireland for far too long”.
Speaking at a press conference in Maynooth last night, as the summer meeting of the Irish Episcopal Conference was coming to an end, Catholic primate Cardinal Séan Brady asked for forgiveness.
“We are ashamed, humbled and repentant that our people strayed so far from their Christian ideals. For this we ask forgiveness,” he said.
In a joint statement the bishops said: “The Ryan report represents the most recent disturbing indictment of a culture that was prevalent in the Catholic Church in Ireland for far too long. Heinous crimes were perpetrated against the most innocent and vulnerable, and vile acts with life-lasting effects were carried out under the guise of the mission of Jesus Christ. This abuse represents a serious betrayal of the trust which was placed in the Church.”