However, Vatican officials accused him of spying on the private lives of his superiors

The Holy See’s former auditor general, Libero Milone, has said he was forced to step down earlier this year after uncovering possible illegal activity. Vatican officials have hit back, however, accusing him of spying.

Mr Milone claimed on Saturday he was forced out over false accusations by an old guard opposed to reform. Speaking to a group of reporters, he said he was speaking out because “I couldn’t allow any longer a small group of powers to [defame] my reputation for their shady games”.

‘I wanted to do good for the Church, to reform it like I was asked, but they wouldn’t let me,” Mr Milone added.

“I believe the Pope is a great person, and he began with the best of intentions. But I’m afraid he was blocked by the old guard that’s still entirely there, which felt threatened when it understood that I could tell the Pope and [secretary of state Cardinal] Parolin what I’d seen with my own eyes in the accounts.”

However, Archbishop Giovanni Angelo Becciu, the Vatican’s deputy secretary of state, said Mr Milone’s claims were “false and unjustified”.

“He went against all the rules and was spying on the private lives of his superiors and staff, including me,” the archbishop told Reuters. “If he had not agreed to resign, we would have prosecuted him.”

Vatican police chief Domenico Giani also said there was “overwhelming evidence” against Mr Milone.

The Vatican Press Office later released a statement accusing Mr Milone of “fail[ing] o uphold the agreement on confidentiality about the reasons for his resignation from office” by speaking to the press.

“According to the statutes, the role of the Auditor General is to examine budgets and accounts of the Holy See and related administrations.

“Unfortunately, the office headed by Dr Milone exceeded its powers and illegally commissioned an external firm to conduct investigative activities on the private lives of officials of the Holy See.

“In addition to constituting a crime, this inevitably compromised trust in Dr Milone, who, confronted with his responsibility, freely agreed to resign.”

Libero Milone was appointed two years ago as the Holy See’s first auditor general, tasked with cleaning up the Vatican’s finances. He had previously worked for Fiat and the UN, and was an Italian delegate for auditing firm Deloitte.

Milone suggested on Saturday he had been forced out after launching an investigation into a possible conflict of interest involving an unnamed Italian cardinal.

He also linked his departure to the exit of Cardinal George Pell, currently on leave of absence fighting child abuse allegations in his native Australia. Milone implied it may be more than just coincidence that the abuse allegations against Cardinal Pell, which date back many years, surfaced while he was leading an overhaul of the Vatican finances.

He also revealed he had hired an outside contractor in 2015 when he suspected his computer had been accessed without authorisation. The contractor found spyware that automatically copies files.

The Vatican officials claim, however, he had used the contractor to spy on other people, going far beyond his brief.

On the morning of June 19, Archbishop Becciu told Milone to resign on the basis of a seven-month investigation by Vatican police.

“The facts presented to me on the morning of the 19th were fake, fabricated,” he said. “I was in shock. All the reasons had no credible foundation.”