A Vatican department advised Ireland's Catholic bishops in 1997 not to report priests suspected of child abuse to the police, a newly revealed letter shows.
Obtained by Irish broadcaster RTE, the letter shows Vatican officials rejected an initiative to begin the "mandatory reporting" of abuse claims.
The proposed policy "gives rise to serious reservations", it says.
The Vatican has persistently said it never instructed bishops to withhold suspicions or evidence of crimes.
Abuse victims in Ireland and the US said the letter, which RTE said it had received from an Irish bishop, was a "smoking gun" that would serve as important evidence in lawsuits against the Church.
But the Vatican said it represented an approach to sex abuse cases shaped by a particular Vatican office, the Congregation for the Clergy, before 2001.
In that year, Pope John Paul II asked the Congregation for the Doctrine of the Faith - then led by the future Pope Benedict XVI - to handle such cases.
Veteran Vatican analyst John Allen said that, while embarrassing, the letter was "not a smoking gun because it is not a directive. Not an order. This is one Vatican official giving his opinion. It is not a policy document.
"It's another confirmation that, in the late 1990s, there was deep ambivalence in the Vatican about how far they should go in terms of reporting priestly sex abuse to civil authorities," said Mr Allen, a reporter for the National Catholic Reporter.
The January 1997 letter signed by the late Archbishop Luciano Storero, Pope John Paul II's chief representative to Ireland, was written a year after an advisory committee of Irish bishops drew up a new policy that included "mandatory reporting" of suspected abusers to the police.
In the text, the bishops were told that the Congregation of the Clergy had studied their new policy and wished to "emphasise the need for this document to conform to canonical norms presently in force".
"The situation of 'mandatory reporting' gives rise to serious reservations of both a moral and a canonical nature," the archbishop wrote.
Bishops who tried to impose punishments outside canon law, he warned, might see their actions overturned when the cases were heard in Rome.
"The results could be highly embarrassing and detrimental to those same diocesan authorities," the letter added.
Archbishop Storero wrote that the Congregation of the Clergy was trying to establish "some concrete directives" on the matter.
In the meantime, he added, "the procedures established by the Code of Canon Law must be meticulously followed under pain of invalidity of the acts involved if the priest so punished were to make hierarchical recourse against his bishop".
Joelle Casteix, a director of the US group Survivors' Network of Those Abused by Priests, described the letter as "the smoking gun we've been looking for".
She said investigators had long sought a document showing the Vatican "thwarting any kind of justice for victims".
"We now have evidence that the Vatican deliberately intervened to order bishops not to turn paedophile priests over to law enforcement," she told the Associated Press news agency.
"This letter shows what victims have been saying for dozens and dozens of years: What happened to them involved a concerted cover-up that went all the way to the top."
Vatican spokesman Father Federico Lombardi said the letter was genuine.
But he told the New York Times: "It refers to a situation that we've now moved beyond.
"That approach has been surpassed, including its ideas about collaborating with civil authorities."
Fr Lombardi said the letter was "not new", and insisted that "they've known about it in Ireland for some time".