The archdiocese of Boston offered the huge sum on 9 August to placate 542 victims of sexual abuse by priests.
But the Boston case is only the latest symptom of a malaise that has poisoned trust in the Roman Catholic church all over the United States and beyond.
And it comes amid fresh revelations that the Roman Catholic church pursued a policy of silence that critics say failed victims and obstructed justice for decades.
The Vatican admitted on 6 August it had drafted a highly confidential document in 1962 demanding total secrecy in cases of sex abuse cases by priests. Anyone who spoke about such cases publicly faced excommunication.
Boasting about two million followers, the Boston archdiocese is one of the largest and most prestigious in the country. But it is mired in a shocking sex abuse scandal that, according to a study by the Massachusetts state attorney general’s office, has claimed more than a thousand child victims over the past 60 years.
History of American abuse
The recent settlement offer is not the first by the Boston archdiocese. The church paid out $10m to 86 victims of Boston priest John Geoghan last year. His criminal conviction for sex abuse caused the latest cases to be exposed.
Elsewhere, the archdiocese of Louisville, Kentucky, last month agreed to pay more than $25m to 243 people claiming they were abused by priests.
Last year alone, some 1,200 priests faced accusations of abuse nationwide, according to a study by The New York Times.
But the record of abuse stretches back further with cases attracting increasing prominence since 1990. Eight US Roman Catholic bishops have resigned since then because of alleged involvement in sex scandals. Seven cases involved the abuse of children.
Two other prelates, Cardinal Bernard Law of Boston and Bishop Manuel Moreno of Tucson, Arizona, resigned amid claims they mishandled cases of abusive clergy.
Cathedral of shame
Auxiliary Bishop Franziskus Eisenbach of Mainz resigned in April 2002, after a university professor said he abused her during an exorcism. Eisenbach denied guilt
Bishop Brendan Comiskey of Ferns was the first known senior cleric to resign over his supervision of an abusive priest. He quit in April 2002, over an accused paedophile
Bishop Roderick Wright of Argyll and the Isles resigned in September 1996, after admitting an affair with a mother of three he was counselling during her divorce. He later married her
Bishop Hubert O'Connor of Prince George, British Columbia, was jailed in September 1996 for two and a half years for abusing two teenage girls at a boarding school where he was principal
Cardinal Hans Hermann Groer of Vienna was forced by the Vatican to retire in April 1995 accused of abusing students at an all-male Catholic high school. He rejected the accusations
Bishop Eamonn Casey of Galway resigned in May 1992, admitting he had fathered the son of a US woman in 1973. Casey used church offerings to pay her child support
Cardinal Bernard Law, once the US’ leading Catholic official, resigned in December 2002, after criticism over his failure to remove abusive priests
Sources: Boston Globe, BBC, AP
In one prominent sex abuse case, the church in Dallas was told in 1997 to pay nearly $120m to 12 former altar boys who were sexually abused by a former priest - the largest Catholic sex abuse settlement ever. This was later reduced to $31m after the church pleaded the penalty would bankrupt it.
The priest, Father Rudolph Kos, was sentenced to life in prison for sexually abusing the altar boys over an 11-year period. Kos would befriend the boys, offering food, drink and video games to tempt them into his home after school.
Confessions and cover-ups
Among the high-ranking US clerics who resigned in disgrace was the late Archbishop Eugene Marino, the nation's first black archbishop. He resigned in July 1990, after admitting an intimate relationship with a young female parishioner.
Archbishop Robert Sanchez, the nation's first Hispanic bishop, resigned from his post in New Mexico in March 1993 after admitting he had sexual relationships with at least five young women in the 1970s and 1980s.
And Bishop J Keith Symons, head of the Palm Beach Diocese in Florida, became the first US bishop to resign over child sexual abuse in June, 1998. Symons admitted molesting five teenage boys at three Florida parishes earlier in his career.
But whereas these bishops confessed their crimes and indiscretions, critics have argued the church has traditionally been obstructive and tried to cover up crimes and allegations.
The recent Boston attorney-general study blamed the church leadership for covering up allegations of abuse against nearly 250 priests.
Such apparent obstruction and concealment has caused US Catholics to lose faith in their leaders. Almost three-quarters of them said their church had done a bad job tackling the problem of sexual abuse by priests, according to a CNN/USA Today/Gallup poll last December.
Pope: 'Evil at work in the world'
But the Catholic church’s association with sex scandals has not been limited to the US. Since 1990, at least 11 Catholic bishops outside the United States have resigned after allegations of sexual misconduct, either committed by themselves or clerics under their supervision.
In Britain, Pope John Paul II sacked Father John Lloyd in 1999 - the first such dismissal of a British Catholic priest in recent history. Llyold was convicted for raping a 16-year-old girl and indecently assaulting two altar boys in south Wales.
The Catholic church in Ireland in 2002 agreed to a $110m payment to children abused by the clergy over decades. More than 20 priests and nuns were convicted of molesting children.
An Irish bishop, Eamonn Casey of Galway, resigned the same year after admitting he had fathered a son - and used church donations to pay the mother thousands of dollars in child support.
Other cases of clerical sexual abuse and harassment have been exposed across Europe and in Australia.
In 2001, the Pope e-mailed an apology for a series of abuses committed by clergy in the Pacific states. These included priests and missionaries forcing nuns to have sex and then abortions.
A year later, the Pope denounced the "sins of our brothers" for bringing shame upon the church, saying they had succumbed to "the most grievous form of evil at work in the world".
But the Vatican has often been criticised for responding too slowly to accusations of sexual misconduct, and its habit of regarding such allegations as malicious.
Hope for the future
A year after US Catholic bishops agreed to tackle sex abuse more openly, progress has been far from smooth. The new policy of openness seemed to be in tatters after the resignation of the church's chief lay investigator in June 2003.
A former state governor, Frank Keating stepped down in frustration after bishops in California voted not to co-operate with his investigation. They claimed it would help abusers sue the church and would violate priests' right to privacy.
But in Boston, a lawyer representing more than 200 abuse victims said the latest settlement offer and the negotiations that preceded it showed promise.
"I think it's a good start and I think the manner in which they've done it is setting the atmosphere for good discussion,” Jeffrey Newman was quoted by Reuters as saying.
Other lawyers spoke of "an obvious change in attitude" after the appointment of Sean Patrick O'Malley as the new archbishop of Boston following the resignation of the much criticised Cardinal Bernard Law.
And in admitting the existence of the secret 1962 directive ordering silence on the subject of clerical sexual abuse, the Vatican has let it be known that no such instruction is now in force.