The Vatican hit back yesterday at new paedophilia revelations, defending Pope Benedict XVI against an allegation that he failed to act over a US priest accused of molesting up to 200 deaf children in the 1970s.

The Roman Catholic Church's morals watchdog then headed by the future Pope was reportedly alerted twice by the archbishop of Wisconsin of the accusations against Reverend Lawrence Murphy.

Pope Benedict, then Cardinal Joseph Ratzinger, did not respond to the letters, and a secret canonical trial authorised by his deputy was halted after Rev. Murphy wrote a pleading letter to the future Pope, The New York Times said, citing documents provided by victims' lawyers.

The Vatican replied yesterday that the Congregation for the Doctrine of the Faith chaired by Cardinal Ratzinger had suggested "restricting" Rev. Murphy's public functions and "requiring (him to) accept full responsibility for the gravity of his acts."

The priest was accused of abusing hearing-impaired children systematically between 1950 and 1974.

The Vatican newspaper Osservatore Romano denounced what it called an "ignoble attempt" to smear the Pope and his closest aides "at all costs." In an editorial, the paper touted the Pope's "transparency, firmness and severity" in response to cases of sexual abuse by Catholic clergy and said: "There was no cover-up in the case of Father Murphy."

The editorial confirms that Rev. Murphy, who was accused of abusing hearing-impaired children systematically between 1950 and 1974, wrote to Cardinal Ratzinger in 1998 asking him to halt Church legal proceedings against him because of his ill health. Cardinal Ratzinger's deputy Tarcisio Bertone - now the Vatican number two -responded to the letter by asking the Milwaukee Archbishop to "obtain reparation of the scandal and the re-establishment of justice," Osservatore Romano said.

The Congregation for the Doctrine of the Faith chaired by Cardinal Ratzinger suggested "restricting" Rev. Murphy's public functions and "requiring (him to) accept full responsibility for the gravity of his acts," the Vatican told The New York Times earlier.

Its rationale was that "Father Murphy was elderly and in very poor health, and that he was living in seclusion and no allegations of abuse had been reported in over 20 years," Vatican spokesman Federico Lombardi added. He noted that Rev. Murphy died in 1998 aged 72, four months after the congregation's instruction.