The two-year-old boy's parents were left fighting for their lives after the horror smash.
The injured driver of the other car was arrested at the scene before being taken to hospital where he later died.
And it emerged yesterday that the unnamed 36-year-old mother lost her unborn baby as a result of her injuries.
Witnesses said it appeared the Polish driver of the Vauxhall Vectra, who was in his 20s, SWERVED into the family's Volkswagen Golf on purpose.
The three on holiday from Cork in Ireland were driving in Torquay, Devon, when Friday's head-on horror happened.
Twenty-five emergency vehicles sped to the Hamelin Way ring road which was closed for TEN hours including three air ambulances.
A police source said: "It is significant that the Major Crime Unit is involved in this inquiry.
"That is highly unusual for a fatal road crash. It indicates there is more behind what happened here than a normal road traffic accident.
"No stone will be left unturned if murder squad detectives, who normally only investigate the most serious cases, have been drafted into this investigation."
Assistant Chief Constable Paul Netherton said: "This was a really traumatic incident for the emergency services.
"It was a head-on collision at speed. The black Vectra was coming down the hill and appears to have swerved into the path of the oncoming car."
The 39-year-old driver and his wife were last night in a "critical life-threatening condition".
The Independent Police Complaints Commission is also investigating "as a matter of course" because a police officer witnessed the collision although his police car had not been in pursuit of the vehicles.
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