The Catholic Church is facing massive structural reorganisation in Scotland in the face of unprecedented decline in numbers of priests and parishes, according to a pastoral letter to clergy and laity. Numbers of parishes in one diocese could be cut by nearly two-thirds.

The Archbishop of St Andrews and Edinburgh, the Most Rev Leo Cushley, warns that the archdiocese is becoming financially unsustainable and is at a turning point. He says "unpleasant" change is ahead.

Two years after he was nominated to the post, succeeding the disgraced Cardinal Keith O'Brien who resigned in the wake of allegations of sexual misconduct, Archbishop Cushley says he has been "taking stock" and the archdiocese now has to face up to the next steps.

Among the causes of decline in the fortunes of God's people, Archbishop Cushley blames "bad shepherds". But he says the "gates of hell" will not prevail and cautions against pessimism.

By 2020 the archdiocese will have just 33 diocesan priests to celebrate Mass, he says. Yet there are at present 111 parishes.

There are currently about 28,000 people at Mass every Sunday. This contrasts with a wider Catholic population of 113,000 baptised people.

Archbishop Cushley says: "These indicators give cause for concern. They also put strain on our financial sustainability. In the light of this, we have undoubtedly arrived at a turning point."

He continues: "This is surely not a situation that we would wish for our Archdiocese. However, I believe that we would do well firstly to acknowledge its existence, and secondly to admit that it requires realistic assessment. There is already little doubt that change must come about for the greater good of us all. It is also true that some of those changes will be unpleasant for some."

The Archbishop hopes that as few parishes as possible will be closed in the 150-year-old diocese but new parish units will be created, effectively merging parishes around numerous buildings as already happens in the Church of England and other Anglican provinces. Some closures are certain however, and the archdiocese is expected to end up with around 30 parishes in total.

Other dioceses and archdioceses such as Glasgow, Motherwell and Galloway are facing similar cuts.

In a separate letter to the Deans of the Archdiocese, Archbishop Cushley has asked them to begin talks on how to co-ordinate resources at a local level, such as sharing church buildings and halls and merging existing parishes. Changes are expected to start towards the end of this year.

In his pastoral letter, Archbishop Cushley says Catholics must not be discouraged by this.

"On the contrary, we read for example in the Old Testament that there were many times when the fortunes of God's People and of his Kingdom on Earth were brought very low. The prophets spoke frankly about the causes of this – unfaithfulness, lack of prayer, injustice, compromise with secular values, and indeed bad shepherds.

"However, at the same time the prophets also gave God's People another vision: it was one of hope, calling the people back to the Almighty with renewed humility and energy. It was only a remnant who answered that call, but their willingness to make sacrifices to rebuild God's kingdom was always rewarded with graces, blessings and the revival of Israel."

He says the Church of the New Testament is not immune to the same fluctuations in its well-being.

"As well as persecutions from powers outside the Church, there have been times of great scandal, confusion and division inside the Church. Jesus promised that the 'gates of hell' – by which he means the powers of spiritual evil playing on fallen human weakness – will not prevail against his Church.

"So whilst this is a time of sober realism, we must not submit to pessimism. Our Lord has promised to be with us until the end of time. When we contemplate our crucified and risen Saviour, we discover that out of sorrow, distress, and even failure, God can bring new and glorious things for those who trust in his goodness."

Structural reorganisation must not be implemented with heavy hearts or dull pragmatism, he says. "We must set about rebuilding God's household with hope and with joy. We can use this time as an opportunity for spiritual renewal and refocusing our energies on a new evangelisation of our world."