Pope Benedict faces child abuse cover-up queriesBreaking News
Documents seen by the New York Times newspaper suggest that in the 1990s, long before he became Pope, he failed to respond to letters about a US case.
Fr Lawrence Murphy, of Wisconsin, was accused of abusing up to 200 deaf boys.
Defending itself, the Vatican said US civil authorities had investigated and dropped the case.
For more than 20 years before he was made Pope, Joseph Ratzinger led the Congregation for the Doctrine of Faith - the Vatican office with responsibility, among other issues, for the Church's response to child abuse cases.
Allegations that the Church sought to cover up child abuse by Catholic priests in Europe have haunted the Vatican for months.
The documents seen by the New York Times suggest that in 1996, the then Cardinal Ratzinger twice failed to respond to letters sent to him personally.
They concerned the Rev Lawrence Murphy, who worked at a Wisconsin school for deaf children from the 1950s.
Two archbishops wrote letters to the Vatican office led by Cardinal Ratzinger calling for disciplinary proceedings against Fr Murphy, but the Vatican halted the process, according to the documents.
On Thursday, a group of clerical abuse victims handed out copies of the documentation during a news conference outside the Vatican.
Peter Isely, the Milwaukee-based director of the Survivors Network of those Abused by Priests (SNAP), told reporters: "This is the most incontrovertible case of paedophilia you could get," according to AP news agency.
"We need to know why he [the Pope] did not let us know about him [Murphy], and why he didn't let the police know about him, and why he did not condemn him, and why he did not take his collar away from him."
Two lawyers have filed lawsuits on behalf of five men alleging the Archdiocese of Milwaukee did not take sufficient action against the priest.
Alleged victims quoted by the New York Times gave accounts of the priest pulling down their trousers and touching them in his office, his car, his mother's country house, on class excursions and fund-raising trips, and in their dormitory beds at night.
According to the New York Times, Fr Murphy was quietly moved to the Diocese of Superior in northern Wisconsin in 1974, where he spent his last 24 years working freely with children in parishes and schools.
Fr Murphy died in 1998, with - in the Church's view - no official blemish on his priestly record.
The Pope's official spokesman, Federico Lombardi, called it a "tragic case" but pointed out that the Vatican had become involved only in 1996, after US civil authorities had dropped the case.
"During the mid-1970s, some of Fr Murphy's victims reported his abuse to civil authorities," the Rev Lombardi said in a statement.
"The Congregation for the Doctrine of Faith was not informed of the matter until some 20 years later."
The Milwaukee diocese was asked to take action by "restricting Father Murphy's public ministry and requiring that Father Murphy accept full responsibility for the gravity of his acts", the Rev Lombardi added.
He also said that Fr Murphy's poor health and a lack of more recent allegations had been factors in the decision not to defrock him.
But the Vatican's decision not to carry out its own investigation is the question that brings the now Pope's own involvement centre stage, says BBC religious affairs correspondent Christopher Landau.
Victims of sexual abuse by priests have long argued that the Church has been more interested in protecting its reputation and helping its priests than seeking justice for victims, our correspondent adds.
Last week the Pope issued an unprecedented letter to Ireland addressing the 16 years of clerical cover-up scandals.
But he has yet to comment on his handling of a child sex abuse case involving a German priest, which developed while Benedict was overseeing the Munich archdiocese.
The Rev Peter Hullermann had been accused of abusing boys in the 1970s when the now Pope approved his 1980 transfer to Munich to receive psychological treatment for paedophilia.
Hullermann was convicted in 1986 of abusing a youth, but stayed within the Church, serving as a village priest until 2008.
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