Updated

Faced with the threat of a criminal indictment, the Roman Catholic Diocese of Manchester has avoided charges by allowing state oversight and admitting it failed to protect children from predatory priests.

The move came as one of the priests at the center of a sex scandal in neighboring Massachusetts prepared to be released on bail and pressure continued to mount for the Catholic leader of that state to resign.

Under terms of the deal announced Tuesday in New Hampshire, the diocese agreed to the rare step of giving state prosecutors oversight of its policies, including an annual audit. The diocese also must beef up training and education.

Priests and other employees must strictly follow the state's mandatory reporting law for suspected child abuse and must immediately report suspicions even if the victim is no longer a minor.

The state was pursuing misdemeanors under its child endangerment law, which experts believed would have been the first criminal charges ever against a U.S. diocese. Violations carry fines of up to $20,000 for institutions.

"The church in New Hampshire fully acknowledges and accepts responsibility for failures in our system that contributed to the endangerment of children," Bishop John B. McCormack said. "We commit ourselves in a public and binding way to address every weakness in our structure."

Grand juries have indicted individual priests and a grand jury in New York issued a report accusing church officials of sheltering molesters. But the New Hampshire settlement is the only one reached so far under the imminent threat of criminal indictment of a diocese.

County prosecutors have been working for months on possible criminal charges against individual priests, but virtually all are barred because many years — often decades — have passed since the alleged incidents. Dozens of victims have reached civil settlements totaling about $6 million this year.

The New Hampshire investigation dated to the 1960s and involved more than 50 priests and more than 100 alleged victims. Attorney General Philip McLaughlin said he had confirmed reports of molestation involving more than 40 priests and was prepared to bring charges based on five or six of them, involving about 30 victims.

"We are sincerely sorry for the harm you have endured," McCormack said to the victims. "Our sorrow rises from within the core of our hearts."

In Boston, a lawyer for the Rev. Paul Shanley told Middlesex County prosecutors that Shanley will post $300,000 cash bail this week, possibly Wednesday, when he was scheduled to appear in court for a pre-trial hearing.

Shanley, 71, has been charged with 10 counts of child rape and six counts of indecent assault and battery for allegedly abusing boys at a church in Newton from 1979 to 1989.

Rodney Ford, the father of one of Shanley's alleged victims, said the news has horrified his now-adult son. "He has a look on his face I haven't seen in years," Ford said. "It's back and it's scary."

A call Tuesday to Shanley's attorney was not immediately returned.

Cardinal Bernard Law, who has been under fire since the abuse scandal erupted in the Boston area in January, remained at the Vatican for talks a day after 58 Boston-area priests signed a letter calling for his resignation.

Voice of the Faithful, a lay group of Catholics, said members planned to vote Wednesday on three separate resolutions calling on Law to resign, asking Pope John Paul II to appoint another bishop, and asking the U.S. Conference of Bishops to follow through on their pledge to hold bishops accountable.

"The damage that's happened in Boston is not just local," said Jim Post, president of the group. "It has affected confidence in bishops everywhere. The question is there now: What secrets are there in our church records?"

Law on Tuesday resigned his post as chairman of the Board of Trustees at Catholic University of America in Washington, D.C. President Rev. David M. O'Connell said Law had indicated in October that he would not run for a fifth term as chairman.

Also Tuesday:

Jury selection began in the attempted murder trial of a former altar boy charged with shooting a priest he accused of molesting him a decade earlier. A defense attorney for Dontee Stokes said the church must be forced to answer for the events that led Stokes to shoot the Rev. Maurice Blackwell in May.

"There are people who have to be held accountable besides Dontee," Brown said. "The church dropped the ball from the beginning; Maurice Blackwell got the whole thing started — and now everyone wants to dump the whole thing on Dontee?"

City prosecutor Sylvester Cox had tried but failed to keep Stokes' allegations of sexual abuse out of the trial. Cox argued that the abuse accusations have nothing to do with the shooting.

"The defense is going to try to put up a smoke screen," Cox said.

Cardinal William Keeler said after the shooting that he regretted reinstating Blackwell following 1993 abuse allegations by Stokes. Blackwell returned to his post after spending three months undergoing psychiatric evaluations. He has not been charged.