By Philip Pullella

VATICAN CITY (Reuters) - Pope Benedict has set up a commission of cardinals to investigate the leaks of sensitive documents to the media alleging corruption and mismanagement in the Vatican.

The documents included private letters to the pope from an archbishop who was transferred to Washington after he blew the whistle on what he said was nepotism and cronyism in the awarding of contracts, and documents alleging internal conflicts about the Vatican bank.

The Vatican said the commission would be made up of three retired cardinals: Spaniard Julian Herranz, Jozef Tomko of Slovakia and Salvatore De Giorgi of Italy.

A statement said they would "undertake an authoritative investigation and throw light" on how the leaks happened.

The scandal, which has come to be known as "Vatileaks", involved the leaking of a series of documents to Italian media in January and February.

A television investigation in January broadcast private letters to Secretary of State Cardinal Tarcisio Bertone and the pope from Archbishop Carlo Maria Vigano, the former deputy governor of Vatican City and now the Holy See's ambassador in Washington.

Vigano was deputy governor of Vatican City from 2009 to 2011, and was head of a department responsible for maintaining the tiny city-state's gardens, buildings, streets, museums and other infrastructure, managed separately from the Italian capital Rome which surrounds it.

The letters showed that Vigano was transferred to the United States after he exposed what he said was a web of corruption linked to the awarding of Vatican contracts to Italian contractors at inflated prices.

He complained in one letter of a smear campaign against him by Vatican officials who were upset that he had taken drastic steps to clean up the purchasing procedures. He begged to stay in the job to finish what he had started.

Bertone responded by removing Vigano from his position three years before the end of his tenure and sending him to Washington, despite his strong resistance.

Other leaks concerned internal conflict about just how transparent the Vatican bank should be.

The Vatican bank, formally known as the Institute for Works of Religion, has been trying to put past scandals behind it and the Vatican wants to make the "white list" of countries that comply fully with European standards of financial transparency.

The Holy See has already announced a criminal investigation by its own police force into the leaks and also an administrative investigation.

Any lay official found responsible by the criminal inquiry for leaking classified material could lose their job, and clerics could incur canonical punishment.

Criminal investigations are very rare in the Vatican. One of the most sensational was opened after Cedric Tornay, a 23-year-old Swiss Guard who had been turned down for a promotion, killed his commander and the commander's wife before committing suicide in 1998.

The Vatican investigator determined that Tornay had acted in a "fit of madness".

(Reporting by Philip Pullella; Editing by Pravin Char and Jon Boyle)