George Carey, the former archbishop of Canterbury, offered “uncritical support” for a bishop accused of sexual abuse, an independent inquiry into child sexual abuse has heard.

Lord Carey said that with 25 years of hindsight, he should not have been so generous in his views of Peter Ball, the former bishop of Lewes and then Gloucester, who was jailed in 2015 for sexually abusing vulnerable young men.

He said was “under great pressure” from Ball’s supporters to believe his protestations of innocence.

Carey was archbishop of Canterbury at the time of Ball’s arrest in December 1992, and his acceptance of a police caution the following year. Ball resigned as a bishop but was allowed to continue officiating in the Church of England.

He did not face a criminal trial for more than 20 years, by which time one of his victims had killed himself. The C of E has been accused of collusion and cover-up in an attempt to protect its reputation.

Carey told the inquiry that church intentions to discipline Ball “fizzled out” because officials thought he was a “sick man” who was going to retire.

Former bishop of Lewes Peter Ball arrives at the Old Bailey for sentencing in 2015. Photograph: John Stillwell/PA

Giving evidence at the inquiry, Carey admitted that a series of letters sent to him following Ball’s arrest that alleged improper behaviour by the bishop should have been passed to police.

One mother wrote that her 17-year-old son had been propositioned by Ball; another correspondent described naked caressing and said others would corroborate such claims; yet another, from a 17-year-old boy, said Ball had urged him to masturbate during a counselling session.

Carey said Ball’s behaviour was “awful” and that as the leader of the C of E, he was “deeply ashamed”. But he said he had not been asked to hand the letters over to the police, who at the time were investigating Ball.

“Looking back now, what is described in these letters is appalling behaviour by a bishop. It’s very clear now that we should have handed those letters over,” he said.

Carey and others at Lambeth Palace “assumed police were investigating thoroughly”.

The inquiry heard that following Ball’s arrest, Carey wrote to the bishop saying: “Peter, I want you to know you are in my heart and constantly in my prayers. You need to know further that the matter does not diminish my admiration for you or my determination to keep you on the episcopal bench. You are greatly loved by so many in the church … so be encouraged and don’t lose heart.”

Questioned by Fiona Scolding QC, senior counsel to the inquiry, about the letter, Carey said: “The first comment I want to make, as I look back now, is what a sickly letter it was, and I’m rather disappointed.

“But you’ve got to remember … he was actually a deeply respected person in the church at that time. Charismatic. I did want to keep him on the episcopal bench, [he was] a man with many gifts, and for a long time that was my intention.”

The letter was written in “very early days”, he added. “I stand by that letter written at that particular time.”

Carey also sent a personal message to be read out in churches in the diocese of Gloucester, where Ball was bishop at the time of his arrest in December 1992. The message – which Carey admitted was a “very rare” move – was written after he had received several letters making further allegations against Ball.

In it, Carey said: “We hope and pray that investigations will clear his name and he will be restored to his great work of Christian ministry. Bishop Peter has always given unstintingly to the service of Christ. Aware of the devastating effect that any such accusation has on those accused, the archbishop asks that people continue to remember Bishop Peter in their prayers.”

The message did not mention those who had allegedly been abused by Ball.

Carey told the inquiry that at the time he could not assume that Ball was guilty. “There was still an open mind about his innocence. I was devastated by these accusations … He was a very highly regarded bishop who was well known throughout the United Kingdom for his work and counsel.”

Thousands of letters in his support had been written. “So we had this great pressure coming on us, on me, to say this can’t be true. That’s behind this letter.”

Scolding pressed Carey on the use of the term “clear his name”, which she said had “stuck in the craw of a number of victims and survivors”.

The former archbishop said: “I shouldn’t have been so generous in my views … I should have mentioned [the victims]. We didn’t, and I apologise for that omission.”

Scolding said Carey’s support for Peter Ball had been “uncritical”.

Carey said he wanted to say something directly to those who were abused by Ball “and let down by me and others in the church”. He added: “They fell into the trap of a pretty wicked person, a deluded person, who used his considerable influence to shape them wrongly. I regret we didn’t see that earlier and I want to say we failed the abused in a number of different ways.”

Carey stepped down last year as an honorary assistant bishop at the unprecedented request of Justin Welby, the current archbishop of Canterbury, after a damning independent report that found the church had colluded over Ball’s abuse.

Earlier this year he was allowed to resume an official role in the C of E.

