ROME/SYDNEY, March 1 (Reuters) - Australian Cardinal George Pell, the highest-ranking Vatican official to testify on systemic sexual abuse of children by clergy in the Roman Catholic Church, on Tuesday said he never notified his superiors in the 1970s about rumours of abuse.

The Vatican’s treasurer told Australia’s Royal Commission into Institutional Response to Child Sexual Abuse that he had heard reports of sexual abuse by at least one priest who was moved to another parish, but assumed senior clergy were dealing with the problem.

“I would concede I should have done more,” Pell told the inquiry in Sydney as he gave evidence for a third day via videolink from a Rome hotel.

Given Pell’s high rank within the church, his testimony to the Australian inquiry into sexual abuse cases that occurred decades ago has taken on wider implications about the accountability of church leaders.

At one point during a testy exchange early in his evidence, Pell was asked about abuse by one priest who was later convicted of 138 offences against more than 50 children in Australia.

“It’s a sad story and it wasn’t of much interest to me,” he said, a statement that prompted audible gasps and was seized upon by the Australian media.

The front page of the Herald Sun newspaper printed a full page photo of Pell leaving the hearing with the headline “See no evil, hear no evil, stop no evil.” The Sydney Morning Herald blared “Pell under fire.”

Around 15 abuse victims and supporters have travelled to Rome to see Pell give evidence after he said he was unable to travel to his native Australia because of heart problems. The majority have been disappointed with Pell’s failing memory on many questions of what he knew about abuse by clergy.

Supporters on Tuesday hung coloured ribbons outside the Australian Domo, a church and residence used primarily by Australian Catholic pilgrims visiting Rome. The Australian Loud Fence movement first hung coloured ribbons on a fence outside a Catholic school in the rural town of Ballarat, where abuse was rife, with the bright colours designed to give a voice to child victims who were silenced.

“ENORMOUS MISTAKES”

Pell, who said this week he has the full backing of Pope Francis, has told the Commission that the church made “enormous mistakes” and “catastrophic” choices by refusing to believe abused children, shuffling abusive priests from parish to parish and over-relying on counselling of priests to solve the problem. he also said senior clergy lied to him to cover up abuse.

Last year, Pell denied accusations made at Commission hearings that he had tried to bribe a victim to remain quiet, that he ignored another complaint and that he was complicit in the transfer of a paedophile priest.

Church sexual abuse broke into the open in 2002, when it was discovered that U.S. bishops in the Boston area moved abusers from parish to parish instead of defrocking them. Similar scandals have since been discovered around the world and tens of millions of dollars have been paid in compensation.

The Australian hearing started on the same night that Spotlight, a film about newspaper reporters who uncovered systemic paedophilia in the Church in Boston, won the Academy Award for best picture. (Editing by David Gregorio)