By Tom Heneghan, Religion Editor

PARIS (Reuters) - The Vatican launched a rare review of a German Catholic diocese on Monday following accusations its bishop spent lavishly on a new residence, putting him out of step with the new "church of the poor" promoted by Pope Francis.

The inquiry is officially called a "fraternal visit" to Limburg diocese by Cardinal Giovanni Lajolo, the former Vatican nuncio (ambassador) in Berlin, and Bishop Franz-Peter Tebartz-van Elst said in a statement he was looking forward to it.

Limburg diocese, which includes Germany's financial capital Frankfurt, has been in turmoil for months as reports of high cost overruns put pressure on Tebartz-van Elst, 53.

A growing number of critics had already accused him of staging pompous church services and communicating poorly.

The visit marks a new willingness by the Vatican to get involved quickly when a bishop's management is under fire.

Mismanagement by bishops and the Vatican's slow response were at the root of the sexual abuse scandals rocking the Roman Catholic Church over the past decade. There are no sexual abuse allegations in the Limburg controversy.

The diocese published a letter to Tebartz-van Elst from Marc Ouellet, the Vatican cardinal in charge of bishops, saying the controversy "strains the unity of the bishop and his people" and "threatens the integrity of your office and your person."

Ouellet noted the bishop had requested an "apostolic visitation," an inquiry often imposed by Rome after a scandal, but said the Vatican had full trust in his management and would instead send Lajolo on a less official "fraternal visit."

"LUXURY BISHOP"

Lajolo, a retired diplomat whose last job was governor of the Vatican city state, would consult the bishop, his advisers and "other relevant persons" to assess the situation "and if needed to admonish in a fraternal way," the cardinal added.

The letter made no mention of any timeframe or final report, suggesting a quick and flexible Vatican intervention rather than the formal procedures of an apostolic visitation. The official inquiry into Ireland's sexual abuse scandals lasted two years.

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German media have focused on the costly new bishop's residence that Tebartz-van Elst had built in Limburg, northwest of Frankfurt, and stressed the contrast to the simple hotel room Pope Francis chose to live in at the Vatican.

Due to cost five million euros, the bill doubled or even tripled before the building opened this year, media reports say.

Tebartz-van Elst, dubbed "luxury bishop" by some newspapers, has promised to publish and explain the final amount soon. A diocesan spokesman was not immediately available for comment.

The residence turned the spotlight on other controversies, such as a Hamburg prosecutor's inquiry into whether the bishop lied under oath while denying a report in the weekly Der Spiegel that he flew first class to India to visit poverty projects.

Tebartz-van Elst said he flew business class.

The bishop's taste for more traditional liturgies has also come under fire in the diocese. An open letter by 22 priests last year accused him of putting orthodoxy before pastoral care.

Last Friday, Tebartz-van Elst received another open letter with 4,500 signatures of priests and lay people that spoke of a crisis of confidence in his leadership.

The bishop issued a statement on Saturday acknowledging the concerns. He offered to hold a series of visits at the residence so members of each parish could come meet him.

"Some of what has been said and written in recent weeks has hurt me," he wrote. "Other things made me think again and I now see some decisions I've made in a different light," he admitted. "Looking back, there are things I would do differently now."

(Writing by Tom Heneghan; editing by Mike Collett-White)