The Vatican said it had frozen funds belonging to a senior cleric at the centre of a suspected money smuggling operation, and could open investigations into other individuals.

Monsignor Nunzio Scarano, who has close links to the Vatican Bank, was arrested last month, accused of plotting to bring millions of euros in cash into Italy from Switzerland for rich friends.

Details of the investigations, including police wiretaps and allegations of plots to smuggle the cash past customs, were also seen as a particular embarrassment for Pope Francis who has focused on the Catholic Church's duty to care for the poor since his election in March.

The Vatican's chief judicial official had ordered the freezing of Scarano's funds in the bank.

Scarano, a former senior accountant in the Holy See's financial administration, was arrested with Giovanni Zito, an Italian secret service agent, and financial broker Giovanni Carenzio.

They have been accused of plotting to bring in 20 million euros ($26.08 million) for Scarano's rich friends in the shipping industry.

Although the bank has not been directly implicated in the case, it is already caught up in a separate investigation into suspected money laundering.

Scarano is also under investigation in another case linked to his accounts in the bank.

Two of the bank's top managers resigned earlier this month in the wake of Scarano's arrest and prosecutors are considering seeking to have the two, former director Paolo Cipriani and former deputy director Massimo Tulli, sent to trial.-Reuters