McDonnell said in a statement that the $100,000 fund was established "with the best of intentions ... to alleviate the responsibility this diocese has under Church law to provide sustenance to priests who are not allowed to function."

However, he said, it "has been so misunderstood it has had to be dissolved."

McDonnell said he had spoken to donors and they had agreed that the money should be used to provide scholarships for students in Catholic schools.

The fund was established last fall by Bishop Thomas Dupre, who abruptly announced his retirement as head of the diocese in February amid allegations that he had molested two altar boys while a parish priest in the 1970s. Dupre and his lawyer have declined to comment on the allegations which are now being investigated by a grand jury.

The fund paid the living expenses of priests who were accused of sexual misconduct and removed from their ministerial duties.

One of the sharpest critics of the fund was the Rev. James Scahill. His East Longmeadow parish has been withholding a portion of its weekly collections to protest continued diocesan support for Richard Lavigne, a defrocked priest who was convicted in 1992 of molesting two altar boys.

McDonnell removed Scahill from the 18-priest Presbyteral Council Tuesday after the two exchanged words over Scahill's public criticism of the new bishop. Scahill said McDonnell was taking too long to decide whether to continue to provide financial aid to Lavigne.

"The Presbyteral Council is meant to be an advisory group to the bishop, not an adversarial one," McDonnell said in a prepared statement, characterizing Scahill's public statements as "personal attacks."

"While we can disagree on the arguments, there is no way that an attack by a priest on his bishop does not have consequences," McDonnell said.

Also on Tuesday, James A. Martone, 62, a permanent deacon who ministered at St. Louis de France and Immaculate Conception parishes in West Springfield was placed on leave pending the investigation, said Laura Failla Reilly, the diocese's victim advocate. He was also placed on paid leave from his job as business manager at Our Lady of Hope Parish in Springfield, she said.

Church officials declined to reveal details of the allegations against Martone, but said they date back to 1991.

"There is only one alleged victim, but there are multiple allegations that go beyond 1991," Reilly said.

Martone's lawyer, Vincent Bongiorni, did not return telephone calls from The Associated Press.

Martone was ordained as a permanent deacon in 1983. Permanent deacons are men who are ordained to work in the church and assist in parish life. They volunteer for the ministerial positions and don't hear confessions.

They can preach and are allowed to officiate at baptisms and marriages, according to diocese spokesman Mark Dupont.