CANBERRA, Australia—A judicial inquiry investigating decades of alleged child abuse by Australia’s Catholic Church has been told that up to 7% of priests may have been pedophiles, with a representative of the church describing the scale of the ill-treatment as a massive failure by senior clergy to protect children.

A judicial inquiry formed in 2012 to investigate accusations of child abuse within institutions including churches, schools, orphanages and sporting clubs heard that 4,444 people had made abuse allegations to 93...