A top Vatican official who is now the envoy to Washington denounced corruption and waste in the management of the Holy See in letters to Pope Benedict XVI, Italian media reported on Wednesday.

Carlo Maria Vigano was secretary general of the governorate of the Vatican -- the person in charge of the administration -- until October, when he was named ambassador to the United States in what was seen as a demotion.

In extracts from the letters published in Corriere della Sera and Libero, Vigano said he had faced a "disastrous" situation when he became head of the governorate in 2009 and said his transfer to Washington was "punishment".

"My transfer is causing disarray and discouragement among those who believed it was possible to resolve the numerous situations of corruption and waste" in the Vatican, he reportedly said in one letter to the pope in March 2011.

Much of his criticism was focused on a Vatican financial committee that includes the head of the Vatican bank, Ettore Gotti Tedeschi. He said the bankers were favouring "their interests" more than the Vatican's.

In one financial operation by the bankers that went wrong, the Vatican made a net loss of 2.5 million euros ($3.2 million), the archbishops said.

He was also highly critical of the cost of basic technical services and said construction contracts for Vatican buildings were always going to the same companies for tariffs that were more than twice as high as in Italy.

He said other cardinals in the Vatican "knew the situation well".

The reports said that Vigano's reforms helped bring the governorate, which includes the Vatican Museums, from a deficit of eight-million euros ($10.4 million) in 2009 to a profit of 34.4 million euros the following year.

Vigano enforced drastic budget cuts, for example for the tending of the Vatican's gardens or for the traditional Nativity scene on Saint Peter's square whose budget went down from 550,000 euros in 2009 to 200,000 euros.

Corriere della Sera said that Vigano encountered hostility and had decided to turn to Benedict because of the pope's stated desire for more transparency.

But the report said that Vigano's move -- as well as a demand by the prelate to meet with his detractors face to face -- had backfired badly.