Abuse survivors and the Catholic Church have welcomed the government’s decision to give the child abuse royal commission more time and extra funding.

The government’s decision to give an extra $126 million and a two-year extension to the royal commission into child sex abuse will allow more survivors to tell their stories, advocates say.

Attorney-General George Brandis on Tuesday announced the government would allocate the extra funds needed by the commission to complete its historic inquiry.

Senator Brandis also announced he had been asked to extend the commission’s reporting deadline to December 15, 2017.

In its interim report in June, the Royal Commission into Institutional Responses to Child Sexual Abuse said it would need a two-year extension on its 2015 deadline and $104 million to finish its work.

Leonie Sheedy, chief executive of CLAN, an advocacy and support network for people abused while in care, has welcomed the news.

“It will alleviate the stress for people who were worrying they would not get to tell their stories” Ms Sheedy she told AAP.

The commission had said if it did not get the time and money it needed it would have to stop scheduling private sessions with abuse survivors, thousands of whom have come forward.

The commission builds its public hearings on the evidence given in private sessions.

“It really does mean that a lot more people will come forward to tell their stories” Ms Sheedy said.

Francis Sullivan, chief executive of the Truth Justice and Healing Council – the body representing the Catholic Church at the commission – said it was great news for abuse survivors.

“It is also good news for the institutions which are being investigated, including the Catholic Church, because it is only after the truth is fully exposed and the history fully revealed that we will be able to work towards rebuilding trust and credibility in the community,” Mr Sullivan said in a statement.

He said governments around Australia must now back the work of the Royal Commission and get behind its recommendations to “ensure Australia has the world’s safest child protection laws and most effective redress scheme.”

Senator Brandis said it was anticipated an additional 30 public hearings, 3000 private sessions and dozens of research projects will be possible with the extra time and funding, which now totals $500 million.

He said he had been assured by commission chair Justice Peter McClellan the extra time would be sufficient to complete the vital work.