Yesterday, as William's parents spoke publicly for the first time, detectives revealed that they were "vigorously" pursuing the new line of inquiry.
Detective Superintendent Michael Willing, head of the NSW Homicide Squad, said: "We have recent information about a paedophile ring in in the area." He said police had specific information about the ring, but declined to give details.
"We will pursue every single angle until we work out what has happened to William," he said.
Officers from the Sex Crimes Unit have joined the investigation.
For legal reasons said to relate to a "complicated family history", the boy's parents cannot be identified. Detectives have cleared all family members of involvement, and believe William was abducted by an opportunistic stranger.
In a video interview released by police yesterday, in which the parents appear in silhouette, they appealed for information.
William's mother described life without their son as a "living nightmare".
She spoke of the heartbreak of watching his sister learn to be an only child.
"We wake up," she said. "We just re-live it. I just can't believe it's happening. We just don't have our boy.
"We have no idea where he is. We don't know who's got him. We don't know what's happening to him."
William's mother and grandmother were sitting in the garden that morning while the children played. His mother went inside to make a cup of tea. When she returned a few minutes later, he was gone.
She was immediately alarmed, she said. "He always had us in earshot or eyesight ... He's not a wanderer, not a child to run away."
Spedding has repeatedly denied any part in William's disappearance, and has said he did not go to the house that day because he was unable to contact the grandmother.
Key facts
• William Tyrrell, 3, went missing from his New South Wales home in September.
• A search of nearby dense bushland by hundreds of police, rescue workers and volunteers failed to turn up a single clue.
• For legal reasons said to relate to a "complicated family history", the boy's parents cannot be identified, although his family have been cleared of any involvement.
• Police now fear a paedophile gang may have abducted him.