US cardinal warned Vatican over sex abuse scandal

The cardinal of the Archdiocese of New York, in his former job, warned the future Pope Benedict that "the potential for true scandal is very real" over sex abuse claims, and he developed a plan to pay some abusers to leave the priesthood, newly released documents say.

Former Milwaukee Archbishop Timothy Dolan - now the most prominent Catholic official in the US - was cast into the spotlight on Monday as the Milwaukee archdiocese released the documents in a deal reached in bankruptcy court with clergy sex abuse victims suing it for fraud.

Victims say the archdiocese transferred problem priests to new churches without warning parishioners and covered up priests' crimes for decades.

The documents provide new details on Dolan's plan to pay some abusers to leave the priesthood and move US$57 million into a trust for "improved protection" as the Milwaukee archdiocese prepared to file for bankruptcy amid dozens of abuse claims.

A Vatican office approved the request to move the money.

Victims' lawyers have accused Dolan of trying to hide the US$57 million from victims. Dolan called any such suggestion an "old and discredited" attack.