POPE Benedict XVI resigned after an internal investigation informed him about a web of blackmail, corruption and gay sex in the Vatican, Italian media reports say.

A team of three cardinals were asked by Benedict to verify allegations of financial impropriety, cronyism and corruption exposed in the so-called VatiLeaks affair.

In December, they handed the pontiff a large portfolio of papers which was "an exact map of the mischief and the bad fish'' inside the Holy See, La Repubblica said.

"It was on that day, with those papers on his desk, that Benedict XVI took the decision he had mulled over for so long,'' said the centre-left newspaper. It said its article was the first of a series.

Panorama, a conservative weekly, did not speculate about the motives behind Benedict's resignation, but its story about the contents of the confidential report was broadly similar.

Vatican spokesman Father Federico Lombardi refused to "run after fantasies and opinions'' and warned reporters: "Don't expect comments or rebuttals of what is being said on this issue.''

Father Lombardi said that the three cardinals had submitted their report privately to Pope Benedict, and it would be passed on to his successor, CatholicCulture.org reported.

The three prelates who investigated the “Vatileaks” scandal and prepared a thorough report - Cardinals Julian Herranz, Jozef Tomko, and Salvatore De Giorgi - will not be giving interviews or divulging details regarding the contents of the report, he said.

Cardinal Herranz, who chaired the commission, confirmed: “The Pope is the only person we have reported to on this question.”

La Repubblica claimed that in a lengthy report on the leaks, the cardinals had alerted the Pontiff to the existence of factions within the Roman Curia, including a powerful faction “united by sexual orientation.”

Some members of that bloc, the cardinals reportedly said, may be vulnerable to “external influence” because of their activities. The Italian newspaper said that the report shocked Pope Benedict and contributed to his decision to resign.

The secret report also delves into suspect dealings at the Institute for Religious Works (IOR), the Vatican's bank, where a new chairman was appointed last week after a nine-month vacancy, La Repubblica said, without going into details.