Asked yesterday if the same situation could exist in Sydney – which has a much larger and more vocal gay community – Dr Pell said "Please God, no".

Dr Pell, who has attracted the ire of Sydney's gay community for his hardline stance against homosexuality, said there was no place in the church for priests who engaged in homosexual activity.

"If they're acting out [their sexuality], that's incompatible with remaining as a priest – so if that's happening they've got to choose one way or the other," he said.

Dr Pell was speaking after addressing a Catholic youth gathering at Sydney University yesterday afternoon where he received a feverish welcome.

Unlike his installation at St Mary's Cathedral last week – which was disrupted by pro-gay protesters – Dr Pell's first Sunday morning mass and afternoon appearance at the Carnivale Christi festival went ahead without a demonstrator in sight.

In fact the 1000 young Catholics who gathered in Sydney University's Great Hall chanted "Pell, Pell" wildly, banged bongo drums and gave the new Archbishop a deafening applause as he arrived to speak to them.

The event, hosted by the Sydney University Society of St Peter and Life Theatre, marked the end of the Carnivale Christi Catholic youth arts festival.

Dr Pell told the throng that they were "in with a chance" of converting people who were strongly opposed to Catholicism "because I believe that if they are so irritated by it, it is a . . . sign that they are terrified that we might have the truth".

Asked outside if he could apply that theory to Sydney's gay community, he said there were "only a few" protesters last week and "there's no one this afternoon".

"I have spoken with many, many people in the gay community and I bear them no ill will and I wish them God's peace," Dr Pell said.

Earlier, he told Channel 9's Sunday program that the description of a group of priests close to him in Melbourne as the Spice Girls was "a slur".

Mary Helen Woods, daughter of Victorian Catholic, the late Bob Santamaria, told the program the group of priests got the nickname because of their love for ceremonies, incense and dressing up in robes.

Dr Pell said the Spice Girl reference was inappropriate.

This report appears on news.com.au.