It has all the trademarks of a great medieval mystery, a classic whodunit with even a butler at the centre of the scandal.

In what has been an extraordinary week of upheaval at the Vatican, Pope Benedict XVI’s butler was arrested on Friday for what may be the greatest breach of secrecy there in centuries. But it may not stop there. There is speculation that the scandal will go much further than the arrest of Paolo Gabriele, a 46-year-old father of three, who has been at the Pope’s side in public and in private for five years.

On Monday Gabriele began co-operating with investigators from his “secure room” at the Vatican — since jail cells and torture chambers were banished some time ago — and there was speculation that the investigation would be widened to include far more senior officials, including a cardinal or two.

“No cardinal is under investigation,” said Vatican spokesman Father Federico Lombardi on Monday after Italian media reports to the contrary.

Before working beside Benedict, Gabriele also served under Pope John Paul II briefly and is one of the few who has complete access to the Pope’s confidential documents and correspondence. He is alleged to possess illegally obtained material linked to the so-called “Vatileaks” scandal, which rocked the Catholic Church earlier this year when sensitive documents appeared in the Italian media.

In one leak, a Sicilian cardinal said he had heard in China about a bizarre plot to kill the Pope. At the time, Father Lombardi dismissed the accounts as ”delirious”.

The documents also included letters to the Pope and the Vatican Secretary of State Cardinal Tarcisio Bertone from the former deputy governor of Vatican City, Carlo Maria Vigano, who made allegations of corruption inside the Vatican before being appointed the Holy See’s Ambassador to Washington.

Gabriele’s arrest came only a day after the president of the Vatican Bank (IOR), Ettore Gotti Tedeschi, was sacked amid internal conflicts about how the bank should be run and demands that it be forced to comply with international transparency standards.

Gotti Tedeschi was once a close adviser to former Italian economy minister Giulio Tremonti. He was named president of the bank in 2009, shortly before Rome prosecutors froze €23 million in bank transfers considered suspicious under Italy’s money-laundering laws.

An arrest or a sacking would normally be enough to rock the Vatican — together they were explosive.

“To say that the Vatican seems in turmoil would be putting things mildly,” said John Allen, one of the world’s top Vatican experts who writes for the influential National Catholic Reporter in the US. “Perhaps it would be more accurate, albeit a bit crude, to say that all hell is breaking loose in the Holy See.”

Earlier last week a book, entitled His Holiness, was published by an Italian journalist reproducing confidential letters and memos between the Pope and his personal secretary apparently leaked by a “deep throat” identified only as “Maria”. The Vatican described the book as “criminal” but it follows the Vatileaks over recent months that have revealed alleged corruption, mismanagement and internal conflicts.

“Everything began last summer when the then governor Carlo Maria Vigano lost his battle against corruption,” one unnamed Vatican insider told Andrea Tornielli, who writes for the Italian daily La Stampa. “It was then that we knew that the Pope had not managed to impose himself on Bertone and we decided to act. This story isn’t over yet.”

What’s disturbing about the latest scandal is what it reveals about the apparent disarray and the struggle for power at the highest of the levels of the Catholic Church.

Perhaps it is nothing new but that simply adds to the intrigue as there appears to be serious divisions between the Curia, the administrative arm of the Vatican, and some of the senior cardinals that is seriously undermining the Pope’s leadership.

One loyalist told the left-leaning La Repubblica that this was simply a battle to contain the power of Bertone and cardinals, personal secretaries and monsignors were uniting behind Benedict.

Who are they? “Those who believe Benedict is too weak to lead the church,” the Vatican insider said. “Those who believe that now is the right time to put themselves forward. In the end it will be everyone against each other.”

The outlook seems dire for the 85-year-old Benedict who looked strained on Sunday when he celebrated Pentecost to mark the founding of the church with 40 cardinals and 50 bishops at St Peter’s Basilica.

As a learned man, the Pope is more comfortable with internal reflection than public debate and he must now be praying that the latest scandal does not become the legacy he leaves behind him.