By Philip Pullella

VATICAN CITY, Feb 27 (Reuters) - Pope Benedict bid an emotional farewell at his last general audience on Wednesday, saying he understood the gravity of his decision to become the first pontiff to resign in 600 years but that he had done it for the good of the Roman Catholic Church.

Addressing an estimated 150,000 people in St Peter's Square the day before he steps down, Benedict said his crisis-hit papacy had included moments of joy but also difficulty when, "It seemed like the Lord was sleeping."

Sitting on an ivory coloured throne on the steps of St Peter's Basilica and frequently interrupted by applause from the crowd, the pontiff said: "There were moments when the waters were choppy and there were headwinds."

When he finished his speech the crowd, including many red-hatted cardinals, stood to clap.

Benedict will abdicate on Thursday night and then cardinals begin consultations ahead of a conclave to choose his successor.

He said he had great faith in the future of a troubled Church, adding: "I took this step in the full knowledge of its gravity and rarity but with a profound serenity of spirit."

Loving the Church meant, "having the courage to take difficult and anguished choices, always having in mind the good of the church and not oneself," he said.

The pope says he is too old and weak to continue leading a Church beset by crises over child abuse by priests and a leak of confidential Vatican documents showing corruption and rivalry among Vatican officials.

A huge crowd from Italy and abroad had flowed into the sprawling square in bright sunshine since early morning for the mid-week audience which is normally held indoors but was moved outside to accommodate faithful wanting their last glimpse of the pope.

Many in the crowd, which streamed into the square across the Tiber River and along nearby streets, held up banners thanking the pope and wishing him well. "We are all on your side," one banner said.


CHURCH CRISIS

Many Catholics were stunned by his decision and concerned about the impact it will have on a Church torn by divisions.

But most of those in the square were supportive and praised Benedict, an increasingly frail figure in the last months of his papacy.

"He did what he had to do in his conscience before God," said Sister Carmela, from a city north of Rome, who came to the capital with her fellow nuns and members of her parish.

"This is a day in which we are called to trust in the Lord, a day of hope," said Sister Carmela. "There is no room for sadness here today. We have to pray, there are many problems in the Church but we have to trust in the Lord."

"He was very humble to do this," said Carla Mantoni, 65, from a parish in Rome.

"I understand why he did this. It was clear from the start that he was more at home in a library. A very good man but he realised in his heart that this was the right thing to do for himself and the Church and now he will pray, he will pray for all of us," she said.

Not everyone agreed.

"He was a disaster. It's good for everyone that he resigned," said Peter McNamara, 61, an Australian of Irish descent who said he had come to the square "to witness history".

The Vatican has said that Benedict, who will move to the papal summer residence south of Rome on Thursday night when the papacy becomes vacant, will assume the title of "pope emeritus" and be addressed as "your holiness".

He will lay aside the red "shoes of the fisherman" that have been part of his papal attire and wear brown loafers given to him by shoemakers during a trip to Leon, Mexico last year. He will wear a "simple white cassock", Lombardi said.

His lead seal and his ring of office, known as the "ring of the fisherman", will be destroyed according to Church rules, just as if he had died.

The Vatican said on Tuesday that the pope was sifting through documents to see which will remain in the Vatican and go into the archives of his papacy and which "are of a personal nature and he will take to his new residence".

Among the documents left for the next pope will be a confidential report by three cardinals into the "Vatileaks" affair last year when Benedict's former butler revealed private papers showing corruption and in-fighting inside the Vatican.

The new pope will inherit a Church marked by Vatileaks and by child abuse scandals involving priests in Europe and the United States, both of which may have weighed on Benedict's decision.

On Thursday, he will greet cardinals in Rome, many of whom have come to take part in the conclave to elect his successor.

That afternoon at 5 p.m. (1600 GMT) he will fly by helicopter to the papal summer retreat at Castel Gandolfo, a 15-minute journey south of Rome.

There he will make an appearance from the window of the papal villa to greet residents and well-wishers expected to gather in the small square.

That will be Pope Benedict's last public appearance.

At 8 p.m. the Swiss Guards who stand as sentries at the residence will march off in a sign that the papacy is vacant.

Benedict will move into a convent in the Vatican in April, after it has been restored.

On Friday, cardinals in Rome will begin meetings known as "general congregations" to prepare for the secret conclave that will elect a new pope.

This week Benedict changed Church rules so that cardinals could begin the conclave earlier than the 15 days after the papacy becomes vacant prescribed by the previous law.

The change means that the cardinals, in their pre-conclave meetings, can themselves decide when to start.

The Vatican appears to be aiming to have a new pope elected by mid-March and installed before Palm Sunday on March 24 so he can preside at Holy Week services leading to Easter.

Cardinals have begun informal consultations by phone and email in the past two weeks since Benedict said he was quitting.

(Reporting By Philip Pullella, additional reporting by Catherine Hornby, writing by Barry Moody)

Loading Slideshow...
  • Faithful gather in St. Peter's Square at the Vatican, Wednesday, Feb. 27, 2013. Pope Benedict XVI has recalled moments of "joy and light" during his papacy but also times of great difficulty in an emotional, final general audience in St. Peter's Square before retiring. (AP Photo/Michael Sohn)

  • Pope Benedict XVI kisses a baby during his general audience in St. Peter's Square at the Vatican, Wednesday, Feb. 27, 2013. Pope Benedict XVI basked in an emotional sendoff Wednesday at his final general audience in St. Peter's Square, recalling moments of "joy and light" during his papacy but also times of great difficulty. He also thanked his flock for respecting his decision to retire. (AP Photo/Gregorio Borgia)

  • Benedict XVI

    Pope Benedict XVI is seen in his pope-mobile, escorted by security, during his last general audience in St. Peter's Square, at the Vatican, Wednesday, Feb. 27, 2013. Benedict XVI has recalled moments of "joy and light" during his papacy but also times of great difficulty in an emotional, final general audience in St. Peter's Square before retiring. Benedict thanked his cardinals, colleagues and ordinary faithful for their support and for respecting his decision to become the first pope in 600 years to resign. (AP Photo/Dmitry Lovetsky)

  • Pope Benedict XVI greets pilgrims at the end of his general audience in St. Peter's Square at the Vatican, Wednesday, Feb. 27, 2013. Pope Benedict XVI basked in an emotional sendoff Wednesday at his final general audience in St. Peter's Square, recalling moments of "joy and light" during his papacy but also times of great difficulty. He also thanked his flock for respecting his decision to retire. (AP Photo/Michael Sohn)

  • Pope Benedict XVI greets pilgrims at the end of his general audience in St. Peter's Square at the Vatican, Wednesday, Feb. 27, 2013. Pope Benedict XVI basked in an emotional sendoff Wednesday at his final general audience in St. Peter's Square, recalling moments of "joy and light" during his papacy but also times of great difficulty. He also thanked his flock for respecting his decision to retire. (AP Photo/Gregorio Borgia)

  • Cardinals attend pope's general audience in St. Peter's Square at the Vatican, Wednesday, Feb. 27, 2013. Pope Benedict XVI has recalled moments of "joy and light" during his papacy but also times of great difficulty in an emotional, final general audience in St. Peter's Square before retiring. (AP Photo/Gregorio Borgia)

  • Pope Benedict XVI greets the pilgrims as he is driven past a banner reading in Italian "Always with the pope", during his final general audience in St. Peter's Square at the Vatican, Wednesday, Feb. 27, 2013. Pope Benedict XVI has recalled moments of "joy and light" during his papacy but also times of great difficulty in an emotional, final general audience in St. Peter's Square before retiring.(AP Photo/Gregorio Borgia)

  • Benedict XVI

    Pope Benedict XVI waves from his pope-mobile to a cheering crowd of faithful attending his last general audience in St. Peter's Square at the Vatican, Wednesday, Feb. 27, 2013. Benedict XVI has recalled moments of "joy and light" during his papacy but also times of great difficulty in an emotional, final general audience in St. Peter's Square before retiring. Benedict thanked his cardinals, colleagues and ordinary faithful for their support and for respecting his decision to become the first pope in 600 years to resign. (AP Photo/Domenico Stinellis)

  • Benedict XVI

    Pope Benedict XVI waves from his pope-mobile as he is driven through the crowd during his last general audience in St. Peter's Square, at the Vatican, Wednesday, Feb. 27, 2013. Benedict XVI has recalled moments of "joy and light" during his papacy but also times of great difficulty in an emotional, final general audience in St. Peter's Square before retiring. Benedict thanked his cardinals, colleagues and ordinary faithful for their support and for respecting his decision to become the first pope in 600 years to resign. (AP Photo/Dmitry Lovetsky)

  • Pope Benedict XVI kisses a baby handed to him by secretary George Ganswein as he greets pilgrims in St. Peter's Square at the Vatican, Wednesday, Feb. 27, 2013. Pope Benedict XVI greeted the Catholic masses in St. Peter's Square Wednesday for the last time before retiring, making several rounds of the square as crowds cheered wildly and stopping to kiss a half-dozen children brought up to him by his secretary. (AP Photo/Gregorio Borgia)

  • Benedict XVI

    Pope Benedict XVI waves from his pope-mobile as he is driven through the crowd during his last general audience in St. Peter's Square, at the Vatican, Wednesday, Feb. 27, 2013. Benedict XVI has recalled moments of "joy and light" during his papacy but also times of great difficulty in an emotional, final general audience in St. Peter's Square before retiring. Benedict thanked his cardinals, colleagues and ordinary faithful for their support and for respecting his decision to become the first pope in 600 years to resign. (AP Photo/Dmitry Lovetsky)

  • Pope Benedict XVI greets pilgrims in St. Peter's Square at the Vatican, Wednesday, Feb. 27, 2013. Pope Benedict XVI greeted the Catholic masses in St. Peter's Square Wednesday for the last time before retiring, making several rounds of the square as crowds cheered wildly and stopping to kiss a half-dozen children brought up to him by his secretary. (AP Photo/Luca Bruno)

  • Pope Benedict XVI is driven through the crowd as he greets pilgrims in St. Peter's Square at the Vatican, Wednesday, Feb. 27, 2013 for the final time before retiring, waving to tens of thousands of people who have gathered to bid him farewell. (AP Photo/Luca Bruno)

  • Pope Benedict XVI greets pilgrims in St. Peter's Square at the Vatican, Wednesday, Feb. 27, 2013 for the final time before retiring, waving to tens of thousands of people who have gathered to bid him farewell Benedict was driven around the square in an open-sided vehicle, surrounded by bodyguards. (AP Photo/Luca Bruno)

  • Pope Benedict XVI greets pilgrims in St. Peter's Square at the Vatican Wednesday, Feb. 27, 2013 for the final time before retiring, waving to tens of thousands of people who have gathered to bid him farewell. Benedict was driven around the square in an open-sided vehicle, surrounded by bodyguards. At one point he stopped to kiss a baby handed up to him by his secretary. (AP Photo/Michael Sohn)

  • Pope Benedict XVI greets pilgrims in St. Peter's Square at the Vatican Wednesday, Feb. 27, 2013 for the final time before retiring, waving to tens of thousands of people who have gathered to bid him farewell. Benedict was driven around the square in an open-sided vehicle, surrounded by bodyguards. At one point he stopped to kiss a baby handed up to him by his secretary. (AP Photo/Michael Sohn)

  • Pope Benedict XVI greets pilgrims in St. Peter's Square at the Vatican, Wednesday, Feb. 27, 2013 for the final time before retiring, waving to tens of thousands of people who have gathered to bid him farewell Benedict was driven around the square in an open-sided vehicle, surrounded by bodyguards. At one point he stopped to kiss a baby handed up to him by his secretary. (AP Photo/Luca Bruno)

  • Pope Benedict XVI greets pilgrims in St. Peter's Square for the final time before retiring, waving to tens of thousands of people who have gathered to bid him farewell. Benedict was driven around the square in an open-sided vehicle, surrounded by bodyguards. At one point he stopped to kiss a baby handed up to him by his secretary. (AP Photo/Gregorio Borgia)

  • Pope Benedict XVI waves as he arrives for his last general audience in St. Peter's Square at the Vatican, Wednesday, Feb. 27, 2013. Tens of thousands of people toting banners saying "Thank you!" jammed St. Peter's Square on Wednesday to bid farewell to Pope Benedict XVI at his final general audience, the appointment he kept each week to teach the world about the Catholic faith. (AP Photo/Gregorio Borgia)

  • Faithful gather to attend Pope Benedict XVI's last general audience in St. Peter's Square, at the Vatican, Wednesday, Feb. 27, 2013. Pope Benedict XVI is preparing for his final general audience, the weekly appointment he kept with the faithful and tourists to teach them about the Catholic faith. (AP Photo/Dmitry Lovetsky)