Bishop Power, 70, was not due to retire for five years, but will step down on June 30.

With Toowoomba bishop Bill Morris sacked by the Pope last year, Bishop Power was the last Australian bishop prepared to challenge the Vatican publicly. He called sexual abuse ''a terrible stain on the church'', and said the Vatican habit of secrecy had provided conditions for sex abuse and many other forms of abuse to thrive.

He said it was essential for the Vatican leadership to be aware of the real issues touching the lives of the faithful. ''Sadly, I don't think they have a good grasp of that reality and when things are tough, as they are now, there can be a temptation to bunker down.''

Bishop Power called the sex abuse crisis the gravest faced by the church since the 16th century Protestant Reformation, needing not just a focus on abusers but a total systemic reform of church structures.

This had to be much more than ''tinkering around the edges'' and must address the authoritarian nature of the church, the participation of women, clergy celibacy and teaching on sexuality.

He said what he was retiring to pursue the pastoral work that first drew him into the priesthood. He retains his title, and will now work as a priest, but without a diocese.

''The thing I have a heart for is to draw the people who are disillusioned and alienated to become part of the family again.''

Leading progressive commentator and former priest Paul Collins said the early retirement of Bishop Power took the Australian church ''further into serious trouble'', not least because it was increasingly hard to find experienced priests prepared to become bishops. ''All this goes back to the total failure of leadership and the failure to tackle controversial issues.

''I'd say a third to half the bishops agree with Pat, but are not prepared to speak out,'' Dr Collins said.