Expert's warning proves Catholic church should have known about failings in dealing with abuse cases, says lawyer

A former pope was warned that paedophile priests should be removed from active ministry and repeat offenders expelled from the church, according to a clerical communique that has emerged following a US lawsuit.

The letter, written in August 1963 by the head of an order that specialised in the treatment of priests accused of abusing children, suggests that the Vatican and Pope Paul VI should have known about failings in procedures for dealing with such cases, according to the lawyer who produced it.

A senior church official swiftly dismissed the claim, suggesting it was unlikely the document would have been seen by the then pope nearly 50 years ago.

The letter has been released as plaintiffs in Kentucky attempt to sue the Vatican for allegedly failing to alert police or the public about priests who molested children, part of a series of abuse scandals that have rocked the Catholic church and left the current pope, Benedict XVI, struggling to defend its reputation.

The document, produced by Anthony DeMarco, a lawyer who acted for plaintiffs in a separate US compensation claim settled in 2007, was written by the Rev Gerald MC Fitzgerald, the head of the Servants of the Holy Paraclete, an order based in New Mexico.

His submission appears to have been drafted at the request of the pope. Fitzgerald opens the five-page letter by thanking the pope for an audience the day before and says he is summarising his thoughts at the pope's request on the "problem of the problem priest" after 20 years working to treat them.

He tells Paul VI that treatment for priests who have succumbed to "abnormal, homosexual tendencies" should include psychiatric, as well as spiritual, counselling but goes on to warn about the dangers of leaving those individuals in ministry.

"Personally, I am not sanguine of the return of priests to active duty who have been addicted to abnormal practices, especially sins with the young," Fitzgerald wrote.

"Where there is indication of incorrigibility, because of the tremendous scandal given, I would most earnestly recommend total laicisation [defrocking]," he wrote. "I say 'total' … because when these men are taken before civil authority, the non-Catholic world definitely blames the discipline of celibacy for the perversion of these men."

A spokesman for the Archdiocese of Los Angeles defended the church, insisting it was unlikely Paul VI had ever seen the 1963 letter. "The fact of the matter is, the prevailing ideas at the time about how to deal with abusive behaviour were not adequate," he said. "Clearly, society and the church have evolved new understandings of what causes sexually abusive behaviour and how to deal with it."

The Catholic church has come under sustained criticism across Europe and in North America for its practice of transferring priests accused of sexual abuse to other parishes, rather than reporting the abuse to civil authorities and removing them from ministry.

DeMarco maintained that Fitzgerald's letter showed the pope had known how pervasive and destructive the problem was. "He says the solution is to take them out of the priesthood period, not shuffle them around, not pass them from diocese to diocese," the lawyer added.

Fitzgerald's views about how to treat abusing priests have been highlighted before. At one stage he proposed buying an island where priests attracted to men and boys could be segregated. He even made a $5,000 down payment on a Caribbean island.

In 1960, he sent two priests from the Paracletes to the island of Tortola to investigate the location but his dream ended when the new archbishop of Santa Fe overruled him.