An Australian inquiry into child abuse has recommended the Catholic Church stop demanding clergy be celibate as criticised “catastrophic failures of leadership” over decades.

It also said priests should be prosecuted for failing to report evidence of paedophilia heard in confession.

But senior members of the Catholic church appeared to dismiss some of the recommendations, describing any potential change to the current practice of confession as a "real hurt to all Catholics".

Australia’s Royal Commission into Institutional Responses to Child Sexual Abuse has delivered its final 17-volume report and 189 recommendations following a wide-ranging investigation.

The longest-running royal commission, its highest form of inquiry, has been investigating since 2012 how the Catholic Church and other institutions responded to sexual abuse of children in Australia over 90 years.

The report heard the testimonies of more than 8,000 survivors of child sex abuse. Of those who were abused in religious institutions, 62 per cent were Catholics.

“We have concluded that there were catastrophic failures of leadership of Catholic Church authorities over many decades,” the report said.

Prime Minister Malcolm Turnbull, a Catholic, recommended all Australians read the report.

“What that commission has done is exposed a national tragedy," he said.

"It’s an outstanding exercise in love and I thank the commissioners and those who had the courage to tell their stories."

Recommendations include that the Australian Catholic Bishops Conference request that the Vatican consider introducing voluntary celibacy for clergy.

It said the bishops’ body should also request clarity on whether information received in the confessional that a child has been sexually abused is covered by the seal of secrecy.

It also wants it to ask whether absolution of a perpetrator should be withdrawn until the perpetrator confesses to police.

“Laws concerning mandatory reporting to child protection authorities should not exempt persons in religious ministry from being required to report knowledge or suspicions formed, in whole or in part, on the basis of information disclosed in or in connection with a religious confession,” the report said.

“We recommend that canon law be amended so that the ‘pontifical secret’ does not apply to any aspect of allegations or canonical disciplinary processes relating to child sexual abuse."

Catholic clerics who testified to the royal commission gave varying opinions about what a priest could divulge of what was said in a confessional about child abuse.

The commission’s recommendations, which with interim reports total 409, include making failure to report child sexual abuse a criminal offence.

Clerics would not be exempt from being charged. The law should exclude any existing excuse or privilege relating to a religious confessional, it said.

The commission found that the church’s responses to complaints and concerns about clerics in Australia were “remarkably and disturbingly similar”.

The president of the Australian Catholic Bishops Conference, Archbishop Denis Hart, said many of the commission’s recommendations “would have significant impact on the way the Catholic Church and others operate in Australia”.

"This is a shameful past, in which a prevailing culture of secrecy and self-protection led to unnecessary suffering for many victims and their families," he said.

“Once again I reiterate my unconditional apology for this suffering and a commitment to ensuring justice for those affected.”

He said the Vatican is already giving “serious consideration” to questions raised by the commission about the extent of the seal of the confession and whether child molesters who did not confess to police could be absolved.

He said he would feel "terribly conflicted" if child abuse was revealed to him in confessional.

But he said: “I cannot break the seal. The penalty for any priest breaking the seal is excommunication; being passed out of the church.

“I revere the law of the land and I trust it, but this is a sacred, spiritual charge before God which I must honour, and I have to try and do what I can do with both.”

Archbishop Anthony Fisher, of Sydney, also warned against changing confessional.

"I think any proposal to effectively stop the practice of confession in Australia would be a real hurt to all Catholics and Orthodox Christians and I don't think would help any young person," he said.

Archbishop Hart said the Australian bishops would put the celibacy recommendations to the Vatican, but added: “I believe that there are real values in celibacy.”

The commission found that celibacy was not a direct cause of child sexual abuse, but was a contributing factor, especially when combined with other risk factors.

“We conclude that there is an elevated risk of child sex abuse where compulsorily celibate male clergy or religious [oreders] have privileged access to children in certain types of Catholic institutions, including schools, residential institutions and parishes,” the report said.