Cardinal Vincent Nichols, Archbishop of Westminster, was asked whether he had suppressed a 1968 note relating to an alleged incident involving Father John Tolkien, son of novelist J.R.R Tolkien.
The note had come to light in legal advice to the cardinal, then archbishop of Birmingham, while considering a civil claim by an alleged victim of Fr Tolkien's.
Asked about the allegation he failed to disclose the existence of the note to the complainant, the cardinal said: "In the context of the claim and the discussions with the solicitors, my priority was to get that settled and when that was settled I simply didn't give the matter any further thought.
"For which I apologise."
The note was drafted by Archbishop of Birmingham Maurice Couve de Murville, as part of a 1993 investigation, suggesting he had sight of information about the 1968 allegation.
No action was taken against Fr Tolkien in the 1990s, and he retired from the priesthood some six months after Archbishop Couve de Murville was told of the allegation.
Fr Tolkien, who died in 2003, was believed to have denied claims he made a group of scouts strip naked.
The alleged abuse happened in the 1950s, when Fr Tolkien was based in Sparkhill, Birmingham.
But evidence which investigators believed suggested the priest may have admitted abuse emerged in the note, which came to light at a series of hearings by the Independent Inquiry into Child Sexual Abuse (IICSA).
The inquiry panel has been examining the Catholic Archdiocese of Birmingham's response to allegations made against four priests, including Fr Tolkien.
Though not reported at the time, the allegations were eventually reported to police in 1994 but no action was taken until an inquiry was launched in May 2001.
In February 2002, it was decided not to proceed with a prosecution against Fr Tolkien on the grounds of ill health, and he died the following year.
Former boy scout Christopher Carrie, who claimed Fr Tolkien abused him in two incidents in the 1950s, received compensation after reaching a settlement with the archdiocese, in 2003.
In a hearing on Thursday, the cardinal who between 2000-2009 was archbishop of Birmingham, was asked about a briefing note from the archdiocese solicitors concerning Mr Carrie's civil complaint.
The lawyers uncovered allegations by as many as six complainants against Fr Tolkien, and concluded: "Carrie is likely to satisfy the (civil) court, Fr Tolkien abused him in the manner he alleges."
Two months later, the lawyers again wrote to the archbishop Nichols, this time having discovered the note.
The solicitor's letter read: "The biggest problem facing the archdiocese appears to be the document which Archbishop Couve de Murville has produced from his file which indicates in 1968 a complaint about Fr Tolkien's behaviour was made to the archdiocese.
"At this time, Fr Tolkien was sent for therapy and therefore I conclude that, judged by the standards of the time, the archdiocese had taken reasonable action."
In the hearing room, in London, counsel to the inquiry Jacqueline Carey asked the cardinal: "You have said the archdiocese would prefer not to disclose this document even if this means settling the action, and it's about that I wish to ask you.
"Why is it you did not wish to disclose reference to the 1968 note?"
Cardinal Nichols replied: "My main objective in going through what the solicitor describes in the first line of this letter as 'the conundrum of this case', my main purpose, I must admit, was to try and avoid civil action, in court.
"The logic of the sentence at the bottom of the page, while I cannot deny that it may well represent exactly what I said, to me should actually say 'the archdiocese would prefer not to take this matter to court, and therefore not to disclose the note'."
Ms Carey then asked: "Did you write back to solicitors and say this is an inaccurate reflection of my view?"
"No I didn't," the cardinal replied.
The cardinal added: "The note obviously had been disclosed to the police, it wasn't as if it was being hidden."
Ms Carey asked Cardinal Nichols: "Were you worried about disclosing the note because for reputational reasons it would show the diocese in a poor light?"
He replied: "I don't remember that being uppermost in my mind.
"Uppermost in my mind was a desire to settle this claim."
Mr Carrie has since died, but another of Fr Tolkien's alleged victims giving evidence to the panel described how he only found out about the note's existence when it was disclosed to the inquiry.
The evidence of a man, who cannot be named for legal reasons, was played to the cardinal.
The man, identified by a cipher A343, told the hearings: "I just want to talk about the letter that came out, that I was told about two weeks ago. The 1968 letter.
"Fr Tolkien was reported to the archbishop, that he abused two boys and they sent him for therapy.
"Knowing that two years later, he abused me in the same school.
"And then they had the nerve to deny the claim that he did anything wrong, when they must have known about it for years and then Vincent Nichols, the so-called cardinal of England and Wales has the nerve to start talking to solicitors on how to cover things up.
"That's not Christian. Unbelievable."
Asked for his reaction, Cardinal Nichols said: "Now that he knows that that report was given in 1968, I am sure that has renewed and deepened his sense of betrayal and sense of hurt and I apologise for that."
Ms Carey asked him: "It is in part, I am afraid, directed at you for what he believes is the cover-up of failing to disclose the note.
"So you can't answer for the actions of your predecessors in the late 60s but what you can answer for is why you decided not to let people know that the church, I'm afraid, did know about it and didn't deal with it properly back in the 1960s?"
The cardinal replied: "In the context of the claim and the discussions with the solicitors, my priority was to get that settled and when that was settled I simply didn't give the matter any further thought.
"For which I apologise."
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