Speculation is mounting over the reasons Benedict XVI became the first pope to resign in 500 years amid fresh revelations of health troubles and claims of a power struggle in the Holy See.

The 85-year-old leader of the Catholic Church said he would step down because of old age and declining strength.

"After having repeatedly examined my conscience before God, I have come to the certainty that my strengths are no longer suited to an adequate exercise of the Petrine ministry," Joseph Ratzinger said.

The Vatican newspaper, L'Osservatore Romano, said Ratzinger felt he could no longer go on after he complained of a physically exhausting trip to Mexico and Cuba in March 2012.

The Holy See confirmed that Ratzinger had hit his head and bled profusely when he got up in the middle of the night during the tour but Vatican spokesman and Ratzinger's trusted man, Fr Federico Lombardi, denied the incident had played a role in the decision to quit the papacy.

Benedict XVI was stepping down for "spiritual" reasons, Lombardi said.

But some Vatican observers said that the real reason for the Pope quitting was the Vatileaks scandal.

Vatileaks betrayal

According to some Italian media reports, infighting and rivalries within the Church had undermined Ratzinger. The final straw they said, came with the leak of internal papal documents by personal butler Paolo Gabriele - the so-called Vatileaks.

Gabriele was convicted and sentenced to 18 months in prison for handing confidential Vatican papers revealing mismanagement, corruption and bitter power struggles inside the Holy See to Italian journalist Gianluigi Nuzzi. Gabriele was subsequently pardoned by the Pope.

The butler admitted to leaking the sensitive documents, saying he wanted to expose the "evil and corruption" inside the Church and said the Pope was not kept properly informed about what was happening.

Benedict was reportedly shocked by Vatileaks and appointed a three-cardinal commission to get to the bottom of the case.

According to Italian weekly Panorama, the cardinals - Julian Herranz, Josef Tomko and Salvatore de Giorgi - presented their report to the Pope on December 17 and Ratzinger decided to resign after reading it.

"The report depicted an unforgiving image of the Curia Romana [the Holy See]," Panorama wrote.

"It was a voluminous account, made up of interviews and questionings, from which emerged a widespread resilience to change and to the enhancement of the transparency wanted by the Pope."

Herranz told Italy's Radio 24: "Surely there are divisions [within the church] as there have always been. They are not new but they do have weight."

Tarcisio Bertone
Cardinal Secretary of State, Tarcisio Bertone, often dubbed as Vice-Pope (Reuters)

Murky finances

Over the last few years, Benedict XVI has worked to implement anti-money laundering and fiscal transparency rules at the Vatican Bank, which is officially known as the Institute for Works of Religion (IOR).

The Pope created a new financial authority to fight illegal financial activity and pledged to submit the IOR to EU transparency rules.

However, the move was reportedly opposed by high-ranking Catholica figures including Cardinal Secretary of State, Tarcisio Bertone, who is also known as the vice-pope.

Ettore Tedeschi, the banker chosen in 2008 to clean up IOR's murky finances, was forced to step down from his role as president of the bank in May at the end of a long fight with Bertone that resulted in the new transparency rules being scaled back.

Officially sacked "to maintain the vitality" of the bank, Tedeschi was also accused of being the main figure behind the Vatileaks scandal. He denied the allegation.

"I am torn between the need to explain the truth and the desire not to worry the Pope," Tedeschi said.

The IOR's presidency has remained vacant since.

Last warning

Celebrating his last mass as Pope in St Peter's Basilica in Rome, Ratzinger's Ash Wednesday homily commented on a passage in the Bible in which Jesus resists the devil's temptations in the desert. Ratzinger warned churchmen against "submitting" Jesus to their own ambitions and "exploiting God for personal glory and interests" - in what some observers claim was a thinly veiled reference to the Vatican power struggles.

He said that Lent, a period of penitence before Easter, should be used to "meditate on [how] sins against the unity of the Church, of the divisions in the body of the Church, [have] disfigured the Church's face".

Benedict is to step down on 28 February.

Pope Benedict XVI
Pope Benedict XVI said he is \"withdrawing into prayer\" (Reuters) Reuters