THE ARCHDIOCESE of Philadelphia allowed a priest to remain in parish ministry in 1989 after psychiatrists diagnosed him as a pedophile, described him as "a very sick man" and strongly recommended that he never be allowed to work around young people, according to internal church records.

One of the doctors who evaluated the priest, the Rev. Peter J. Dunne, "stated quite bluntly that we are sitting on a powder keg," a church official later noted in a memo.

Dunne's records emerged Tuesday in the trial of Monsignor William J. Lynn, the former secretary of clergy accused of enabling child-sex abuse by failing to remove priests suspected of sexual misconduct. Prosecutors are introducing evidence about old allegations against Dunne and other priests to suggest that church officials for years understood the signs and depth of clergy sex abuse, but chose to hide the problem from parishioners, endangering children.

Dunne had been long active in the Boy Scouts and archdiocesan schools when a California man reported in 1986 that the priest had pressed him into a sexual relationship decades earlier when he was 13. Dunne privately arranged a settlement with his accuser.

Dunne also resisted or ignored archdiocesan officials' repeated attempts for treatment, despite telling one therapist that he may have had "six or seven" incidents of sexual misconduct, the records show.

One September 1988 memo to then-Archbishop Anthony J. Bevilacqua noted that staffers at St. John Vianney, the church-owned hospital in Downingtown, overheard Dunne tell others: "I have beaten the system."

In a meeting with the priest later that month, the records indicate, Bevilacqua pressed Dunne to return to therapy. Bevilacqua cited three driving reasons: the potential for scandal, the good of the church and Dunne's well-being.

Dunne resumed his therapy but remained an assistant pastor at parishes in Warminister and Norristown until being placed on administrative leave in 1994.

He died in 2010.