The Knights of Malta – an ancient Catholic order that dates back to the crusades – have enjoyed the privileges of a sovereign state for 900 years. Last night the Order of Malta was effectively stripped of its sovereignty in what appears to be a brutal power-grab by the Vatican.

Pope Francis has demanded and received the resignation of the Grand Master, Fra’ Matthew Festing, a devoutly orthodox Englishman of (even his critics agree) unimpeachable orthodoxy and personal morality. The Vatican has now taken charge of the order while the knights search for a grand master acceptable to Francis. Canon lawyer Dr Edward Condon this morning tweeted out the reaction of many Catholics:

“ In terms of international law, the Holy See just annexed another sovereign entity.

A source close to the order puts it more bluntly: 'It's like an invasion. Nine hundred years of sovereignty wiped out overnight.'

Festing's 'resignation' follows a complicated row over the dismissal of the order's Grand Chancellor, Albrecht von Boeselager, who was accused of permitting the distribution of condoms by the order's international charitable arm.

Boeselager appealed to his friend, Cardinal Pietro Parolin, the Vatican Secretary of State, who set up an inquiry made up of Boeselager's allies. Festing and the leadership of the order refused to accept the authority of the inquiry, because – they argued – the Vatican had no temporal authority over a body that is independent under international law.

The argument over Boeselager and the condoms is convoluted, to say the least. This Catholic Herald report explains much of the background. The former Grand Chancellor may or may not have a case; what is certain is that he is extremely well-connected. Allies don't come more powerful than Parolin, the Pope's foreign secretary, whom many suspect of twisting the Pope's arm in this matter.

The humiliation of Festing is a dreadful business. He is a good-natured and holy man who, until his appointment in 2008, was an archetypal English 'Catholic toff' – Ampleforth and Cambridge, former Guards officer, son of a field marshal, no less, and on his mother's side descended from Blessed Sir Adrian Fortescue, martyred in 1539.

Pope Francis likes him – so why has he sacked him so abruptly, without adequate explanation? Is it another manifestation of the erratic behaviour I described in a Spectator article earlier this month?

Boeselager – himself monumentally grand, and the son of one of the 1944 Wehrmacht plotters against Hitler – must feel vindicated today. Whether he can afford to relax is another question.

Let me draw your attention to today's report by Edward Pentin of the National Catholic Register, which contains the following intriguing information:

“ Also behind the dispute were allegations of an ambitious German association vying for control of the Order, accusations that the Grand Master was being overly authoritarian, and conflicts of interest among members of the Holy See commission. Three members of the commission along with Boeselager have also been involved in a $118 million donation held in a trust in Switzerland. Despite documentation proving the contrary, the trust denied any connection with the Order.

Will the Vatican, which has just hounded a good man out of office and trashed the sovereignty of its most ancient and loyal chivalric order, now also investigate this mysterious donation?