In a gruelling session of more than four hours, he told the Victorian inquiry into child abuse that the church had changed the date on a document making serial abuser Des Gannon a priest emeritus and had kept paying a stipend to another paedophile, Ron Pickering, who fled Australia to avoid police.

The Sydney Archbishop said he and his successor as Melbourne Archbishop, Denis Hart, took moral responsibility for helping victims and that the church was open to paying higher sums in compensation - whatever the law deemed necessary.

The church would be happy to contribute to an independently managed redress fund for victims, provided ''others are asked too''.

He denied that he was like Pontius Pilate, washing his hands of the abuse problem, or that the $30 million hostel that the Sydney archdiocese had built in Rome with permanent rooms for him was ''a palace''.

Cardinal Pell said he accepted Victorian Premier Denis Napthine's challenge at the weekend to be ''fully apologetic and absolutely sorry'' and lashed former Melbourne archbishop Frank Little even more strongly than Archbishop Hart did last Monday, calling his actions ''totally reprehensible''.

Of former Ballarat bishop Ronald Mulkearns, Cardinal Pell said he only learnt recently that Bishop Mulkearns had destroyed files on abusers, and that his actions had disastrous consequences.

But Cardinal Pell defended his own record, particularly in establishing the Melbourne Response system for dealing with abuse victims within 100 days of becoming archbishop of Melbourne in 1996.

He said he did not regret not having done more as the Melbourne Response was adequate at the time. He did not believe he had ever moved a paedophile priest and had certainly never covered up criminal behaviour.

In other evidence, Cardinal Pell admitted that the church had kept sending money for a decade via a Melbourne parishioner to paedophile priest Ron Pickering after he fled to England to avoid police investigation.

He also attacked the state government, which he said could have forced the church to do more, as the Wood inquiry did in NSW, and an ''intermittently hostile media''.

Agreeing that the church's ancient canon law was inadequate for dealing with clergy sex abusers, he said the church was open to further improvements, such as those the inquiry might recommend, and he expected Victoria's Catholic churches would co-operate in ''taking matters forward''.

He defended clergy celibacy, saying ''marriage is no deterrent to paedophiles''.

There were several lively exchanges with committee members.

Andrea Coote challenged the morality of limiting victims to a ''mere $75,000'' when the $30 million hostel in Rome could have doubled the compensation for hundreds of victims.

''The church has never claimed it would be unable to pay appropriate compensation,'' Cardinal Pell replied.

Frank McGuire: Do you agree that the Catholic Church placed paedophile priests above the law?

Cardinal Pell: In some cases, unfortunately.

Mr McGuire: ''It was see no evil, hear no evil, do nothing by the church?''

Cardinal Pell: ''That's an objectionable suggestion with no foundation in the truth.''

On forging the date on a letter about Des Gannon, twice jailed for child sexual abuse, who was allowed to resign on health grounds, David O'Brien said: ''It's utterly reprehensible isn't it?'' Cardinal Pell: ''It is''.

The cardinal continued: ''You've got to blame the archbishop. The way he did it was totally reprehensible.''

Cardinal Pell was questioned at length about supporting serial rapist Gerald Ridsdale in court 20 years ago to the day. He said that because he had always been on the side of victims he did not realise the angst and distress it would cause them.

Another case was the Foster family, two of whose daughters were repeatedly raped over years from the age of five by another serial abuser, Kevin O'Donnell, against whom the church received allegations in 1946, 1958 and 1986.

Anthony Foster told the inquiry last year that Cardinal Pell showed ''a sociopathic lack of empathy'' when he met the parents in 1997, and on Monday the cardinal described the meeting as unfortunate. After challenging them to go to court, the Fosters won a settlement of $750,000 plus costs.

On the ''deeply irreligious'' Jeff Kennett, who called him in when he was appointed archbishop and said ''if you don't clean it up I will'', Cardinal Pell said he admired the former premier in many ways, and that they were ''not entirely dissimilar characters''.

In his concluding statement, Cardinal Pell regretted that the church had not been called earlier during the inquiry, which had begun with searing criticism and a response written by Archbishop Hart had not been published until much later.

''Because these charges were unanswered, many people in the public think not only were there many mistakes made a long time ago but there's been no progress at all over the last 20 years,'' he said.

''I don't think that's borne out by the facts of the case, but that's for people to judge.''

Child abuse victim Stephen Wood said his expectations of Cardinal Pell's testimony had been low and that he had ''lived down to them''.

With Jane Lee.

WHAT PELL SAID

Frank McGuire: Do you agree that the Catholic Church placed paedophile priests above the law.
Cardinal Pell: In some cases, unfortunately.

Mr McGuire: You were playing Pontius Pilate over this. You were washing your hands.
Cardinal Pell: That's a complete misstatement, a complete misunderstanding.

Mr McGuire: "It was see no evil, hear no evil, do nothing by the church?"
Cardinal Pell: "That's an objectionable suggestion with no foundation in the truth."

David O'Brien (on protecting Des Gannon) "It's utterly reprehensible isn't it?" "It is".
Mr O'Brien: "It's un-Christlike." "I would have to agree."