In a further sign of the Vatican's "Green" policies, wood from the Christmas tree inaugurated on St Peter's Square at the weekend is to be recycled to make "toys for needy children" and school benches, Vatican officials said.

The 120 year old 33 metre high tree was illuminated despite torrential rain which brought the nearby Tiber close to bursting its banks, with boats, jetties and tree debris blocking the arches of an historic bridge at Castel Sant'Angelo, within sight of St Peter's.

Today Sunday the water began to recede, although officials warned that further rainstorms were predicted. A 27 year old Irishman, Vincent Thomas Wall from Waterford, who was swept away in the fast moving current when he joined crowds late at night watching the swollen river, remains missing, feared drowned. He had been attending a wedding celebration in Rome.

The tree, a red spruce from Piesting Valley in Austria, is the tallest to be erected on the square since the late Pope John Paul II began the tradition of setting up a Vatican Christmas tree in 1982. Braving the rain, pilgrims from Austria sang carols beneath the tree, decorated with 2000 gold and silver balls. The giant Nativity scene next to it is still under construction and will be unveiled on Christmas Eve.

Pope Benedict XVI thanked Austria for the tree, saying it would "give him joy" to see it from his window high above the square. The decision to recycle the wood follows the installation of solar panels on top of the Paul VI Audience Hall, providing the hall and nearby buildings with 300,000 kilowatt-hours a year of electricity.

Vatican officials say this will save more than 70 tonnes of oil and 200 tonnes of carbon dioxide emissions a year and will enable Vatican City to generate 20 per cent of its energy needs from renewable sources by 2020, in line with European Union targets.

Visiting Australia during the summer for World Youth Day, Pope Benedict said humanity must "stop squandering the world's mineral and ocean resources to fuel its insatiable consumption." A Vatican "Climate Forest" is being planted in Hungary to offset carbon emissions in Vatican City, one of the world's smallest sovereign states.

At Angelus prayers today Sunday the Pope blessed Nativity crib figures of the infant Jesus brought to St Peter's Square by Rome children. He said this was a "beautiful tradition".