Paolo Gabriele says he will co-operate over confidential documents allegedly found at his home

One of the Vatican's biggest scandals in decades has widened, with the pope's butler agreeing to co-operate with investigators over confidential documents allegedly found at his home, according to his lawyer.

Paolo Gabriele's pledge to co-operate with Vatican magistrates means high-ranking prelates could soon be named in the investigation into leaks of confidential Vatican correspondence that have shed a light on power struggles and intrigue at the highest levels of the Catholic church.

Italian media report that a cardinal is suspected of playing a major role in the "Vatileaks" scandal. However, the Vatican spokesman, the Rev Federico Lombardi, denied the reports. He said many Vatican officials were being questioned in the investigation but insisted: "There is no cardi nal under suspicion."

He also dismissed as "pure fantasy" a rash of other unsourced reports about the investigation in the Italian media, which have been in a frenzy ever since reports of Gabriele's detention emerged last Friday.

Gabriele, the pope's personal butler since 2006, was arrested last Wednesday after documents he had no business having in his possession were found inside his Vatican City apartment. In custody in a Vatican detention facility, accused of theft, he has been allowed to see his wife and his lawyers.

Gabriele's lawyer Carlo Fusco said his client would "respond to all the questions and will collaborate with investigators to ascertain the truth".

The 46-year-old Gabriele was always considered extremely loyal to Benedict and to his predecessor, John Paul II, for whom he briefly served. Vatican insiders said they were baffled by his alleged involvement in the scandal. Fusco reported on Monday that Gabriele was "very serene and calm".

So far, he remains the only person who has been arrested, but Lombardi stressed that the investigation was continuing.

The scandal broke in January when the Italian journalist Gianluigi Nuzzi broadcast letters from the former number-two Vatican administrator, Monsignor Carlo Maria Viganò, to the pope. In the letters, Viganò begged not to be transferred for having exposed alleged corruption, which cost the Holy See millions of euros in higher contract prices. The prelate is now the Vatican's US ambassador.

The scandal widened over the following months, with documents leaked to Italian journalists that laid bare clear power struggles inside the Vatican over its efforts to show greater financial transparency.