One of the largest Catholic dioceses in the United States has taken a step towards declaring bankruptcy in response to lawsuits alleging child abuse by priests.

The Archdiocese of Boston - which is facing an estimated $100 million in claims from about 450 alleged victims - received permission from its finance council on Wednesday to declare bankruptcy.

If they do declare bankruptcy, we look forward to Cardinal Bernard Law explaining to a judge why he lives in a palatial mansion

Roderick MacLeish, plaintiffs' lawyer

If the church goes through with the move, it could delay resolution of the lawsuits for years by putting the assets of the diocese into the hands of a bankruptcy judge.

No American diocese has ever declared bankruptcy, though two came close in the 1990s in the face of suits alleging child abuse.

Plaintiffs' anger

Lawyers for the plaintiffs responded with dismay to the announcement, saying that the threat of bankruptcy could jeopardise ongoing settlement talks between the Church and alleged victims of abuse.

"We hope the archdiocese does not file for bankruptcy. We think it would be cruel if that happens. We think it would be a form of moral bankruptcy," lawyer Roderick MacLeish Jr told The New York Times newspaper.

Victims' groups accuse the Church of putting clergy first

"If they do exercise these options, we look forward to Cardinal [Bernard] Law explaining to a bankruptcy judge why he lives in a palatial mansion while our clients lie wounded on the battlefield," he added.

Cardinal Law and the Boston church have been at the centre of a scandal that has swept America's Catholic communities this year over allegations of priests abusing children.

A spokeswoman for the Boston archdiocese said the church had not yet decided if it would file for Chapter 11 protection - as declaring bankruptcy is known in the US - and that it would need Vatican permission in any case.

But a Vatican observer told BBC News Online that in practice, the Holy See would almost certainly back whatever decision Boston made.

"There would be a great deal of scrutiny but at the end of the day, the overwhelming bias would be in favour of saying yes," said John Allen, Vatican correspondent of the National Catholic Reporter.

Resignation

Critics of the archdiocese were especially angry that the finance committee's decision came on the same day as the release of personnel documents of eight Boston priests accused of molesting children.

Law is unlikely to have to surrender his ring

A pressure group, Voice of the Faithful, is to meet within the next few days to consider whether or not to call for Cardinal Law's resignation in light of the revelations in the files.

Mr Allen told BBC News Online that the Vatican was unlikely to back any calls for the cardinal to go - but not because the Holy See supports him.

"A lot of people in the Vatican are genuinely angry and think it's too easy to let him walk away. They want him to stay and fix the problem," he said.

"I have not met anyone in the Vatican who does not believe that Cardinal Law made horrific mistakes," he said.

"They think it's disgusting and they're astonished and angry."