Father Paul Milarvie was accused of "unwanted harassment" and trying to "constrain" a male guest at his parish house in 2010, just months after he returned to Scotland, leading to an investigation by the Archdiocese of Glasgow. Milarvie, a friend of Philip Tartaglia, the next archbishop of Glasgow, was allowed to keep his post by Mario Conti, the current archbishop.
News of the case, which emerged at the end of a week in which Tartaglia and Conti both spoke out against SNP plans to legalise same-sex marriage, prompted claims the Church was hopelessly confused in its attitude to homosexuality because it failed to reflect the reality of human nature.
After initially trying to cast doubt on the story, the Church last night admitted the case had been "morally reprehensible", although it said it involved no illegal behaviour.
Milarvie, 46, was vice-rector of the Pontifical Scots College in Rome from 2001 to 2005, and its rector from 2005 to 2009. Founded in 1600, the college is the only seminary for Scotland, with would-be priests spending seven years there before working in Scots dioceses.
Milarvie worked directly for Tartaglia, who was rector in 2004 and 2005. After Tartaglia left to become Bishop of Paisley in November 2005, he called Milarvie a "superb colleague and friend" in his ordination speech. Milarvie became rector, and after four years returned as parish priest for St Flannan's, Kirkintilloch.
The complaints against him centred on two nights in the summer of 2010, when he invited another man to dinner at his parish house. According to Conti's written judgment on the case, on the first occasion there was a homosexual incident, the nature of which is disputed, after both men had "a large amount to drink". Milarvie later apologised.
To show the apology was accepted, the other man agreed to a second dinner, but complained he was then subjected to unwanted harassment, with Milarvie attempting to constrain him. After the man complained to the Archdiocese, the church held an in-house investigation.
Milarvie and the man gave evidence under oath to church lawyers, and Archbishop Conti gave his verdict on the case in November 2010. He declared there had been no crime, and claimed there had been "consensual" gay activity, rather than an unwelcome approach by Milarvie.
He added that, even allowing for the "morally reprehensible over-indulgence" in drink, Milarvie's actions had been "voluntary and totally unworthy behaviour on the part of a priest".
Both men were told to repent and offered pastoral and psychological counselling by the Archdiocese.
Milarvie, the Church's representative on the education committee of East Dunbartonshire Council, was allowed to remain priest of St Flannan's, and in March this year was given the additional responsibility of being priest for the parish of St John of the Cross in Twechar.
It is understood that Bishop Tartaglia is aware of the Milarvie case.
Glasgow Green MSP Partick Harvie said: "In general, the Church is never going to resolve the confusion in its own attitude to everybody's sexuality until it recognises that human nature is not something morally wrong that needs to be constrained – it needs to be valued. Sexuality is something that the Church needs to get into the 21st century on."
The Catholic Church's attitude to homosexuality is under the spotlight in Scotland because of its attacks on gay marriage.
Tartaglia has emerged as a key critic of same-sex unions, which he says crystallise the "crisis" in relations between the Church and a liberal political elite.
In 2010, he said the Catholic Church "will not register civil partnerships nor celebrate same-sex unions: not now, not in the future, not ever, no matter what legislation or regulations [the UK] government enacts or endorses".
Confirmation last week that the 61-year-old would be installed as the new Archbishop of Glasgow in September should have made him a more powerful critic of the moves.
However, the following day he was accused of making homophobic remarks after a video emerged of him suggesting the Labour MP for Inverclyde, David Cairns, had died prematurely because of his homosexuality.
Cairns died last year aged 44 from acute pancreatitis caused by gallstones.
As the row over Tartaglia's remarks engulfed the Church, Health Secretary Nicola announced the Scottish Government would press ahead with plans to legalise same-sex weddings in Scotland, despite an official consultation recording two-to-one opposition.
Ministers in Edinburgh and London are now working on amending the 2010 Equality Act at Westminster to ensure that no church or religious celebrant can be compelled to conduct same-sex ceremonies.
Scottish Government officials insist the announcement was not linked to the publicity surrounding Tartaglia's problems, but admitted his blunder meant the debate was framed in terms of an out-of-touch, sex-obsessed clergy and socially progressive modern Scots.
The Catholic Church, which says gay weddings would undermine the institution of marriage and society, has pledged to fight the proposals, and has designated August 26 "Support Marriage Sunday".
Contacted yesterday, Milarvie said: "I'm afraid I do not wish to make any comment about this." He then hung up the phone.
A spokesman for the Archdiocese said: "The Church presents its teachings, offering what it believes to be moral truth, while recognising that people fall and are called to repentance.
"This case involved a situation of immoral but not illegal activity which happened under the influence of alcohol and which was judged to be 'morally reprehensible'.
"It is perhaps ironic that after being criticised for being overly harsh in its approach to homosexuality, the Church seems now to be criticised for being overly lenient."