Father David Pearce was allowed to continue living in the monastery at Ealing Abbey, West London, which ran the neighbouring St Benedict’s School, months before he started to abuse his final victim.
Yesterday the Vatican made clear that bishops must “always” report such crimes to the police.
A letter obtained by The Times shows that the Diocese of Westminster’s child protection commission was aware of allegations dating back to the late 1980s against Pearce, a former headmaster at the independent school.
The police had investigated at least two cases but no charges were brought.
The letter reveals that Peter Turner, the commission’s child protection officer, told Abbot Martin Shipperlee in 2005 that a risk assessment had concluded that Pearce should be banned from contact with children.
He wrote that “Father David has been the subject of four separate allegations over a period of about four years”.
He added that Pearce should be in restricted ministry “in order to protect children and young persons and to protect Father David from any unfounded allegations”.
A year after Pearce was allowed to continue living at the monastery he was ordered by the High Court to pay £43,000 compensation to one of his victims. He then started to abuse a teenage boy being paid to work at the abbey.
The Catholic Church has confirmed that the then Archbishop of Westminster, Cardinal Cormac Murphy-O’Connor, had been told of the advice given to Ealing Abbey allowing Pearce to remain.
The Church’s child safety watchdog at the time was headed by the Archbishop of Birmingham, the Most Rev Vincent Nichols, who last year was appointed the head of the Church in England and Wales. Archbishop Nichols has denied being informed of the allegations against Pearce.
Pearce, 68, was jailed last October after admitting abusing five boys over a 35-year period.
Ealing Abbey said it had started moves to have Pearce removed from the priesthood, but the case will not be “fast-tracked” as the priest is in jail so is not currently a risk to the public.
The Vatican has posted new guidance on its website about child abuse allegations and restricting the activities of suspect priests. They appear to mirror those already used by the Church in England and Wales.
The guidelines say that local bishops are required to investigate “every allegation of sexual abuse of a minor by a cleric” and report any allegations that have “a semblance of truth” to the Congregation for the Doctrine of the Faith.
The guidelines say that in the preliminary stage of an investigation, bishops can impose “precautionary measures” to safeguard their diocese against sexually abusive priests by “restricting their activities ... to whatever extent is necessary to assure that children do not come to harm”.
The Congregation for the Doctrine of the Faith is also empowered to refer a priest directly to the Pope for defrocking “in very grave cases where a civil criminal trial has found the cleric guilty of sexual abuse of minors” or where the priest admits his offences and requests dismissal from the priesthood.
Cardinals have spoken of a “concerted campaign” by “powerful lobbies” to smear the Pope with claims of a cover-up.
Yesterday there were unconfirmed reports that Mgr Giacomo Babini, Bishop Emeritus of Grosseto, had said that a “Zionist attack” was behind the criticism of the Pope, that Jews were the Church’s “natural enemies” and that “deep down, historically speaking, the Jews are deicides [God killers]”.
Mgr Babini was quoted as having told an Italian Catholic website that Hitler had exploited German anger over the “excesses” of German Jews, who in the 1930s had “throttled” the German economy.
Denying making such remarks, Mgr Babini, 81, said: “Statements I have never made about our Jewish brothers have been attributed to me.”
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