THE Pope's butler has implicated at least two cardinals in a network of a moles who stole and leaked confidential documents from the Vatican, according to reports.
Paolo Gabriele, 46, who was arrested two weeks ago after investigators allegedly found a cache of stolen papers in his Vatican apartment, would meet the cardinals and other contacts, including journalists, in bars and cafés just outside the walls of the city state.
If found guilty of stealing the papers and letters, including some apparently taken directly from the desk of Pope Benedict XVI, the valet would lose his Vatican apartment and could be "exiled" from the Holy See, the Italian press reported.
Mario Monti, the Italian prime minister, spoke out about the scandal for the first time, saying he was sorry for the pain that the "Vatileaks" affair had caused the 85-year-old German pontiff.
"Certainly I am surprised and profoundly saddened by what I've read of the Vatican affair," Mr Monti, an economist who replaced Silvio Berlusconi in November, told Famiglia Cristiana (Christian Family), a Catholic magazine.
"But I also think about the very deep pain that many people are suffering, and of the pain that it has caused to the heart of the Holy Father."
Mr Gabriele, who is married with three children, was interrogated all day on Tuesday by Vatican investigators, in the presence of his two lawyers.
His alleged role in the murky affair is also being probed by a specially-appointed commission of cardinals, all of whom are in their eighties.
The butler had a reputation for being sociable and "loquacious" and had regular meetings with cardinals, monsignors and journalists, the Italian press reported on Wednesday.
But no clear motive has emerged for why he would betray the trust of the Pope and risk his job, his family home and his future as a member of the Pope's inner circle.
Mr Gabriele, who has been allowed to attend Mass in a Vatican chapel, will be interrogated again by Vatican prosecutors, as they try to determine whether there is enough evidence under the city state's penal code to send him to trial.
Federico Lombardi, the Vatican spokesman, has insisted that for the moment the butler is the only person being investigated in the scandal, which has provided a rare glimpse into high-level feuds and jockeying for power within the hierarchy of the Catholic Church in Rome.
The butler, whose job was to attend the Pope first thing in the morning and last thing at night, and to accompany him in his white "Popemobile", risks six years in prison if he is found guilty of "aggravated theft".
He is being held in one of four "secure rooms" inside the headquarters of the Vatican Gendarmerie, the city state's tiny police force.