UPDATE 2-Butler stole papers pope wanted destroyed -police
* Butler had information on how to hide computer files
* Trial adjourned until Saturday, when verdict expected
* Butler had clippings on occult, Masons, secret services (Adds quotes, colour, background)
VATICAN CITY, Oct 3 (Reuters) - Pope Benedict's former butler stole highly sensitive papers the pontiff had marked "to be destroyed" and compromised Vatican security through his actions, the Holy See's police told his trial on Wednesday.
On the third day of Paolo Gabriele's trial, testimony depicted a man fascinated by the occult, Masonic lodges, secret services and past Italian and Vatican scandals.
"You can understand our unease when we saw these documents. This was a total violation of the privacy of the papal family," said police agent Stefano De Santis, one of the four agents who said they found the papers in Gabriele's home, using a Vatican term for the pope's closest aides.
Gabriele's leak to an Italian journalist of sensitive documents, some of them alleging corruption in the Vatican, caused one of the biggest crises of Pope Benedict's papacy.
It threw an unflattering spotlight on the inner workings of a city-state eager to shake off a series of scandals involving sexual abuse of minors by clerics around the world and mismanagement at its bank.
Gabriele, a trusted servant who served the pope meals, helped him dress and rode in the popemobile, has admitted passing papers to the journalist at secret meetings, but told the court at a previous hearing he did not see this as a crime.
The former butler sat impassively and occasionally smiled during Wednesday's 75-minute session as Vatican policemen told the court how they searched his apartment in the Vatican on May 23, the night of his arrest, and what they found.
The mass of incriminating documents, most of which were hidden in huge piles of papers stashed in a large wardrobe, included personal letters between the pope, cardinals and politicians on a variety of subjects.
Some papers, De Santis said, bore the pope's handwriting and had been marked "to be destroyed" by the pontiff in German. He did not say what those papers concerned.
Some of the documents were copies of encrypted documents. "One photocopy was enough to threaten the operations of the Holy See," De Santis told the court, without elaborating.
The agents said they found a mass of documents and books filled with newspaper clippings on the occult, secret services, Masonic lodges, yoga, political scandals in Italy, scandals involving the Vatican bank and other subjects.
Defence lawyer Cristiana Arru sought to turn the spotlight on police methods during the search, drawing out several agents to say that they had not used gloves when they handled the documents, and a gold nugget and a cheque for 100,000 euros made out to the pope which were also found.
Police said Gabriele, once one of fewer than 10 people who had the key to an elevator leading to the private papal apartment, had printed instructions on how to hide files in computers and how to use cellphones secretly.
Bishop Francesco Cavina, who knew Gabriele in the Vatican, told Italian newspaper La Repubblica on Wednesday that the butler, a father-of-three, may have a "disturbed mind" and "a split personality".
Two of the four policemen who testified on Wednesday also rejected Gabriele's accusations, made on Tuesday, that he was mistreated for several weeks after his arrest.
Gabriele told the court's previous hearing that for up to 20 days he was held in a room so small he could not stretch out his arms and that the light was left on 24 hours a day, causing him eye damage.
A Vatican judge ordered an investigation into the allegations.
De Santis said the search turned up "many more" papers than appeared in a book by Italian journalist Gianluigi Nuzzi, who wrote a muckraking expose early in 2012.
The letters to the pope included one in which a senior Vatican functionary expressed concern about corruption in the Holy See's business dealings with Italian companies.
The letter-writer, Archbishop Carlo Maria Vigano, was posted to Washington after raising the issue, despite begging to be allowed to stay at the papal state.
The trial adjourned until Saturday, when a verdict is expected. (Reporting By Philip Pullella and Naomi O'Leary; Editing by Andrew Heavens)