The independent study, examining church files sometimes dating back to 1945, was meant to shed light on undiscovered cases of abuse after about 600 people filed claims against molesting priests in 2010 following a wave of revelations.
The German scandals were part of a series of abuse scandals that also shook the Catholic Church in Ireland, Belgium, the Netherlands and the United States, and forced Pope Benedict to issue a public apology.
Bishop Stephan Ackermann, spokesman on abuse issues for the German Bishops' Conference, said on Wednesday the hierarchy had lost confidence in the researcher, criminologist Christian Pfeiffer, and would look for another specialist to take up the study.
"We regret that this project ... cannot be continued and we will have to find a new partner," Ackermann said in a statement that blamed Pfeiffer's "communications behaviour with church officials" for the breakdown.
Pfeiffer told German Radio the bishops wanted to change previously agreed guidelines for the project to include a final veto over publishing its results, which he could not accept.
"Everything was settled reasonably and then suddenly came ... an attempt to turn the whole contract towards censorship and stronger control by the church," said Pfeiffer, head of the Lower Saxony Criminological Research Institute.
The critical lay Catholic movement We Are Church called the decision "a devastating signal for the credibility of the church leadership" that showed the bishops could not accept an independent inquiry into the scandals.
German Justice Minister Sabine Leutheusser-Schnarrenberger said the church's effort to clear up the scandals should not end in "a half-hearted inventory".
"It's high time that the Catholic Church opened up and let outside experts look at its archives," she told the Sueddeutsche Zeitung newspaper.
In Germany, about 180,000 Catholics left the church in protest in the wake of the scandal in 2010, a 40% jump over the previous year.
Probes into the records of priests accused of molesting children have been conducted in recent years in other countries, sometimes with devastating results for the reputation of the church involved.
Ireland was deeply shocked when several inquiries conducted by the government revealed widespread abuse and a pattern of secrecy to cover them up. Three bishops resigned as a result.
An official Dutch report said up to 20,000 children had been sexually abused in Catholic orphanages, boarding schools and seminaries between 1945 and 2010. Some 1,975 people filed complaints as victims.
A commission set up by the Belgian church received 475 reports of abuse before its premises were raided in 2010 by police seeking evidence for possible criminal cases against predator priests. It reported 13 victims had been driven to suicide.
Revelations of sexual abuse cases in the United States starting in the 1990s led to a wave of court cases costing the church $US2 billion in settlements and a few diocesan bankruptcies.
Clash over contract
Speaking to German Radio, Ackermann accused Pfeiffer of reinterpreting his research contract and said the bishops had tried to clarify some points in the agreement because they feared he would publish results without their permission.
"We weren't trying to hold things back," he said. "We want a similar project to go ahead and we will look for a new partner."
Ackermann noted that another researcher had produced a parallel report into the abuse crisis without any problem.
That study, which concluded most priests accused of sexual abuse were psychologically normal, was lambasted as a whitewash by victims' support groups.
Pfeiffer also said he had found out after starting his study, which was to examine files for nine dioceses since 1945 and 18 dioceses between 2000 and 2010, that files on convicted abuser priests could be destroyed 10 years after the verdict.
A church spokesman said there were no signs that files had been removed.
Pfeiffer said his team of researchers would continue its work without church support, appealing to victims to report cases to them so they could produce a report on their experiences.