A senior Catholic cleric with connections to the Vatican bank was arrested yesterday for plotting to help rich friends smuggle tens of millions of euros in cash into Italy from Switzerland, in the latest blow to the Vatican's image.

Monsignor Nunzio Scarano, 61, who worked as a senior accountant in the Vatican's financial administration, was arrested along with an Italian secret service agent and a financial intermediary in a tale that reads like a spy novel.

It involves police wiretaps, a private plane rented to collect the cash from Locarno, burned cell phones, an allegedly corrupt secret services agent who promised to get the money past customs and a shady financier.

Details of the case against Scarano will come as an acute embarrassment to Pope Francis, who, since his election in March, has pointedly eschewed many of the trappings of office and sought to stress the importance of a simple life of devotion.

Only two days ago, the Vatican announced he had set up a commission of inquiry into the Vatican bank, which has been hit by a number of scandals in the past decades.

Scarano, who was arrested in a Rome parish and taken to Rome's Queen of Heaven jail, had hatched a plot to bring up to $52 million into Italy for a family of shipbuilders in his hometown of Salerno in southern Italy, magistrate Nello Rossi said.

He is already investigating the Vatican bank for money laundering, and the latest arrests stemmed from that.

Rossi and fellow magistrate Stefano Pesci said there was no indication so far that the bank was directly involved in the attempt to bring the money, but the investigation was continuing and more searches were underway.

Scarano is under separate investigation in southern Italy in relation to his accounts in the Vatican bank.

According to Rossi, in July last year Scarano engaged Giovanni Zito, a paramilitary Carabiniere policeman on loan to the secret services, to help him get the money, which was in a Swiss bank, into Italy without tax and customs controls.

The third person arrested was Giovanni Carenzio, a financial broker with offices in Switzerland and the Canary Islands and who was acting as the fiduciary for the owners of the money.

The three originally planned to bring back 40 million euros in cash but later reduced it to 20 million euros.

A private plane went to Locarno from Rome and waited several days before returning to Rome without the money.

The cash never left Switzerland because of disagreements and nervousness among the three, Rossi said.-Reuters