Defrocked Irish cleric Oliver O'Grady was yesterday charged with possession of thousands of pornographic images of children, some as young as two.

He was granted bail at Dublin District Court despite garda objections. Judge James McDonnell heard that 65-year-old O'Grady was arrested at his Dublin hostel on Friday morning just after 7am. The material confiscated included images and videos on a USB key, an external hard drive and a laptop. Det garda Johanna Doyle told the court: "We are talking about thousands upon thousands of images of child pornography. Children from the age of two and three up to teenage boys and girls."

Defending solicitor Dara Robinson told the court that his client had difficult personal circumstances and did not have financial means. "His personal circumstances are very unfortunate; he is a highly educated man who has had a very serious fall from grace. He has significant estrangement from his family and his social circumstances have changed."

The court heard the defendant rents a lock-up facility and a postbox in which to store his personal belongings.

O'Grady, with an address at Citi Hostel, 6 Charlemont Street Dublin 2, was formally charged at Pearse Street garda station at 3.13pm yesterday with possession of child pornography. Gardaí told the court that further charges are likely to follow.

The former priest, wearing a black jacket, black trousers and a blue sweater, remained silent throughout except when asked to clarify his name and address. Det garda Doyle told the judge that O'Grady has lived at various addresses in Ireland since his deportation from the US in 2001.

Gardaí strenuously objected to bail on the basis of how serious the charges were and that there were more to follow. However, Robinson argued that the court could only deal with the issue of bail on the basis of the charge before the court. Judge McDonnell consented to bail of €500 and told O'Grady that he must sign on twice daily at Harcourt Terrace garda station before his next court appearance next Friday.

Det garda Doyle asked that a condition of bail be that O'Grady have no contact with children. Judge McDonnell said this could not be implemented as O'Grady lives in a hostel. O'Grady gave an undertaking not to seek travel documentation as the gardaí have confiscated his passport.