With just minutes to spare before the public inquiry into child abuse at the North Coast Children's Home adjourned for the weekend, Rev Comben told the royal commission that with "all the foresight of hindsight...we were wrong".
The admission changed the tone of the inquiry which only hours before had heard Rev Comben justifying his decision not to call for a professional standards director to be sent to the region by saying the "diocese was not keen to spend any money".
He also claimed that until he received letters from abuse survivor Richard "Tommy" Campion and his sister, he had "never even heard of the North Coast Children's Home" and that a reluctance to respond at one point was due to an archdeacon of the church assuring him "nothing had occurred" and former residents of the home ringing to tell him "it was a great place".
Asked why he had described the original group claim of $4million against the Church as a "fishing expedition", Rev Comben denied the Counsel's suggestion that he was "deeply sceptical" about the plans and said he was only "a little sceptical".
When it was put to him that the commissioners were "very concerned" that the threat of legal action had seen Rev Comben and his colleagues abandon Christian principals, he said he "certainly made a mistake" and the Church could "only apologise".
He said "one bit of defence" was that the threat the Church was facing - 40 litigants and multi-million lawsuit - was "scary".
Rev Comben is expected to be questioned over a series of letters he sent to former group claim solicitor Simon Harrison when he returns to the witness stand next week.
The commission will also hear from former Grafton Bishop Keith Slater and Primate of the Anglican Church of Australia, Rev Dr Phillip Aspinall.
See the special report in tomorrow's paper.
WARNING - APN Newsdesk's continuing coverage of allegations against Lismore's North Coast Children's Home and the special report on the royal commission in our NSW print editions, contains graphic details of child sex abuse and subsequent trauma. Victims of abuse can seek support and counselling by calling the Victims Access Line on 1800 633 063 or Heartfelt House Northern Rivers on (02) 6628 8940
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