LOS ANGELES -- A popular Los Angeles priest told Cardinal Roger M. Mahony in 1986 that he molested young boys, but was reassigned to parishes and allegedly continued his sexual abuse of minors for more than a decade, documents and interviews show.

Mahony later approved a secret $1.3 million payment to two men who said they had been abused by the priest, Father Michael Stephen Baker, from 1984 to 1999. The cardinal arranged for the priest to quietly retire from the Catholic Archdiocese of Los Angeles in late 2000.

In a letter of complaint that led to the settlement, attorney Lynne M. Cadigan wrote that Mahony and the archdiocese had failed to ensure that Baker did not repeat his sexual offenses against children.

"No one at the Archdiocese of Los Angeles, including Cardinal Mahony ... reported Baker's sexual abuse of children to the authorities, to the parents of the abused children or to any other foreseeable victims. Nor did they attempt to find out all the children that he had molested."

Baker, now 54, allegedly molested at least nine youths beginning in 1976, according to interviews with victims, relatives and lawyers.

It was not until recent weeks that Mahony, under increasing pressure to reveal the names of clerics accused of sexual misconduct, reported Baker to law enforcement.

On Tuesday, Mahony faxed a two-page letter to about 1,200 priests in the archdiocese, acknowledging that he had mishandled the case.

"As your archbishop, I assume full responsibility for allowing Baker to remain in any type of ministry during the 1990s," Mahony wrote. "I offer my sincere, personal apologies for my failure to take firm and decisive action much earlier."

The letter, addressed to "My Brother Priests," warned of an upcoming media story on Baker. The Times has been preparing an article about the priest. "You need to be aware that such a story could come anytime now, and you need to be aware of the seriousness of this case," Mahony wrote.

The cardinal also notified the priests that archdiocese leaders have now learned of more allegations of sexual misconduct against Baker. He is one of at least 30 current and former priests from the archdiocese under investigation by criminal authorities.

In a series of interviews with the Times, Baker described going to the offices of the archdiocese in 1986 and telling Mahony of his problem with sexual abuse. He said that in one meeting, an archdiocese lawyer suggested calling the police but that Mahony said no.

The cardinal said in an interview that he could not recall the discussion with Baker.

The case is emerging as a pivotal one for Mahony and archdiocese leaders as they continue to grapple with the sexual abuse scandal that has hit the Roman Catholic Church. In an interview last month, Mahony called the Baker case the one "that troubles me the most."

The cardinal has sought to portray himself as a defender of young victims and an advocate of cooperating with criminal investigations. At Pope John Paul II's historic meeting with American cardinals in Rome last month, Mahony backed a "zero tolerance" policy for sexually abusive priests.

But leaked e-mail correspondence between top archdiocese officials reveals that Mahony was reluctant to turn over Baker's name to police as recently as late March.

The cardinal answered some questions about Baker last month but declined in the past week to be interviewed. An archdiocese spokesman cited Mahony's workload and recovery from a recent blood clot in his lung.

In an interview last month, the cardinal said the archdiocese had few options in dealing with Baker because the allegations against him were unproven. "Our biggest problem was that ... he wasn't found guilty of a criminal act," Mahony said. "That's a big problem."

In his letter to priests, Mahony did not disclose his failure to notify police when he learned about Baker's alleged abuses against minors in 1986 and again in 2000. But he wrote, "If I had known in those years what I discovered in early 2000, I would have dismissed him from all ministry and requested his dismissal from the priesthood in the late 1980s."

Of all the cases involving archdiocese priests facing claims of sexual abuse, Mahony said, Baker's is most troubling because he allegedly molested a number of children in the 1970s, '80s and '90s and continues to live in the area unsupervised.