Brisbane Archbishop John Bathersby has given Father Kennedy, of St Mary's Church in South Brisbane, until Saturday to resign or face the axe.
The archbishop said police would be called "as a last option" to remove Father Kennedy from the church.
He has accused Father Kennedy, 71, of being "out of communion" with the church by presenting unapproved services including giving Holy Communion to gay and divorced people, baptising babies using unorthodox wording and not wearing traditional vestments.
Father Kennedy's supporters include Gold Coast nurse Mary Adams, who said the St Mary's priest helped her and others set up a support group for victims of child sex abuse by the clergy.
Ms Adams said she had been sexually abused in 1962 as a 12-year-old boarder at the St Joseph's Home orphanage at Neerkol, near Rockhampton. She said the priests had not been charged.
Ms Adams and hundreds abused as children had received no help through the Catholic Church's Towards Healing program, set up in 1996 after the jailing of several priests and brothers for sexual abuse, she said.
The program was promoted as an in-house alternative to civil court action and promised justice and compensation to victims.
"A lot of people abused by the priests and brothers are now in their 70s and have spent their whole lives suffering because nobody in the church would acknowledge the abuse," she said. "If the church thinks it can get away with the abuse, it will continue to ignore victims and just move priests to other parishes, states or overseas where they continue to abuse."
She said she had met victims who later committed suicide because they could not cope with their memories and being ignored.
Father Kennedy allowed Ms Adams to use his office in 1994 to run the Neerkol Action Support Group in support of sexual abuse victims.
"I went to St Mary's last Sunday to support Peter [Kennedy] because I was so angry about the church's hypocrisy that protects pedophiles and abusers in the church," she said.
Ms Adams wrote to the Catholic Church's professional standards office last month protesting about the way the church had treated her and other victims. It had
left her "very saddened and disillusioned", she wrote. "It's only clergy like Father Peter Kennedy that has been there for us. . . and I admire this wonderful man . . . "
Father Kennedy said last week pedophilia had turned thousands of parishioners away from the religion in Australia and overseas.
"I'm threatening the church's power base by questioning their way of thinking and that's why they want to get rid of me," he said.
He said many priests suspected of pedophilia were told to stop saying public Mass, then moved to another parish, state or country while their crimes were covered up.
Last year, The Sun-Herald revealed convicted pedophile Father Ronald McKeirnan celebrated weekly private masses at The Marist Brothers House, which adjoins a school, in inner-city Paddington. McKeirnan, who remains a priest, served a year in prison in 1998 and 1999 for molesting nine boys.
In 2006, a parent whose son attended the nearby school, Marist College Rosalie, complained to the Catholic Archbishop of Sydney, Cardinal George Pell, about McKeirnan and a "cover-up" by the Brisbane Archdiocese.
"Cardinal Pell replied that the issue . . . was a matter for the Brisbane Archdiocese," she said. After further complaints by parents, Archbishop Bathersby withdrew his permission for McKeirnan to say Mass.
Ms Chris McIsaac, president of victims' support group Broken Rites, said more than 100 brothers and priests had been convicted of sexual assault since 1993. "From the victims' point of view we find it disappointing that the church finds these sorts of issues [complaints against Kennedy] more important than child abuse," she said.
An archdiocesan spokesman said last week: "Any priest convicted of sexual offences has their faculties [permissions to exercise priestly office] suspended and is . . . removed from all public ministry."
Once Father Kennedy was removed from St Mary's, he would hold "no office".
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(Source: BTAU)