Documents obtained by the ABC reveal the NSW Police Service was warned twice by one of its own lawyers that an intelligence sharing arrangement with the Catholic Church on child abuse claims was illegal.

In explosive evidence expected to emerge at a Police Integrity Commission (PIC) hearing this week, an officer from NSW Police Service's Crime Agencies Legal Support sounded the warnings in 2001 and 2002 about a draft memorandum of understanding (MOU) between the church and NSW Police.

Under the draft MOU, a police sex crimes squad officer sat on an internal church body, known as the professional standards resource group.

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Set up by Catholic bishops, the expert panel was created to advise the church on specific cases of child sexual abuse involving clergy and others.

The officer's role was to advise whether church practices had breached the law. She would also advise on whether priests should be removed from their positions.

The PIC will investigate whether the participation of this officer, between 1998 and 2005, amounted to police misconduct.

Lawyer warned draft MOU was 'nonsensical and undesirable'

In 2001, Sergeant Allan Treadwell of Crime Agencies Legal support warned: "If the draft MOU is settled, there would prima facie be a conflict between the requirements of the MOU and the law."

This was because the MOU ran contrary to section 316(1) of the NSW Crimes Act, which required disclosure of all information which might assist in investigating a crime.

Under the MOU, the church would only share some of the information with police.

"I would suggest that it be nonsensical and undesirable for the NSW Police Service to enter into private agreements inconsistent with public law," Sgt Treadwell said.

In 2002, Sgt Treadwell repeated his warning, obtaining written support from lawyers Peter Kristofferson and Rod Blume at the Police Commercial Law Section.

He wrote: "It is proposed that the MOU should not be entered into. It is my view that any reasons for entering into the proposed MOU will now necessarily be operational and not legal".

Ex-DPP says the warnings are significant new evidence

Former director of public prosecutions Nicholas Cowdery said the new documents were significant new evidence for the commission to consider.

"I'm very pleased that some additional concrete evidence of this kind has emerged," Mr Cowdery told the ABC.

"They show that for a very considerable period of time the terms, the spirit of the MOU, was continuing to be applied [in] the face of clear advice that it was inappropriate to do so."

Mr Cowdery has long held concerns the presence of the police officer on the church panel was a conflict of interest and should never have been approved.

"The police are entitled to full information about alleged serious criminal offences and the terms of this agreement sought to qualify that in the interests, I would suggest, of the Catholic Church," he said.

"To place a police officer in the position of having to adjudicate or to rule on or even to take part in discussions about such an arrangement is just totally improper".

Greens say it 'beggars belief' that arrangement continued

Greens MP David Shoebridge said it beggared belief the Police Service's own lawyer had advised the arrangement was illegal, yet it continued for years.

"This is a matter the PIC needs to investigate. Is it just incomprehensible ineptitude by police?" Mr Shoebridge said.

"Is it part of a concerted arrangement by the church? And why are there so few checks and balances in the police force that allows this to go on for a decade?"

A police spokesman said it would be inappropriate to comment while the matter was before the commission.

But police have previously said the MOU was only a draft and not operational.

However, documents show the senior church officials believed the MOU was in force.

The PIC will also investigate whether there was police misconduct in the participation by the police service in any agreement, protocol or MOU, whether formally or not formally entered into, between police and the church on the handling of abuse complaints.

The hearing is expected to run for five days.

A spokesman for the church's Truth, Justice and Healing Council said: "The council welcomes the Police Integrity Commission's MOU inquiry into the NSW Police Force and Catholic Church Professional Standards Resource Group.

"Any investigation that can provide greater clarity around the relationship between the police and the Catholic Church in relation to child sexual abuse is welcome and will be fully cooperated with."