ATLANTA, March 29 — After a 7- year-old boy complained to his teacher in February about welts on his back, Georgia child welfare authorities were surprised to discover that the beating had taken place not at his home but at services in his church, a tiny nondenominational congregation called the House of Prayer, northwest of downtown.

And the boy was not alone, a state investigation concluded. Welfare authorities said nearly 60 children had been seriously beaten by their parents and by church leaders, under the supervision of the Rev. Arthur Allen Jr., the pastor. Several children had open wounds, large bruises and welts, investigators said.

Mr. Allen and four church leaders were charged with cruelty to children and released on bail.

On Wednesday, in an Atlanta juvenile court, Chief Judge Sanford Jones reluctantly decided not to release 41 children of church families from foster care. Judge Jones said the children could go home if their parents agreed to spank them only with their hands, and by themselves at home, and not to allow girls younger than 16 to marry.

The parents refused.

"We're going to raise our children according to the Bible," said one parent at the hearing, David Duncan.

Judge Jones replied: "I regret that. I hate to see these children jeopardized by what I consider to be a cult."

In the three weeks since state officials began removing the children from their parents, the case has transfixed the city and illuminated the distinctions that juvenile authorities must make between acceptable corporal punishment and child abuse. D'Anna Liber, of the Division of Family and Children Services, said Georgia law allowed corporal punishment but not physical injury.

"Parents have wide latitude in their method of punishment, and spanking is within their right," Ms. Liber said. "But if they lacerate the skin or leave marks or injure the child, that would cross the line into abuse."

Using an object to strike a child is often considered excessive, she said, particularly if the object leaves a mark.

The department's investigators are encouraged to take pictures of injuries, she said, and to use common sense in judging them. A single red welt on a 3-year-old is much more serious than one on a 16-year-old, she said, and the location of the injury is also considered.

In hearings this month, police investigators told juvenile-court judges that the beatings were standard practice at the church, performed by parents and other adults with belts and switches under the supervision of Mr. Allen. Police photographs showed three-inch-long welts on the children, and a 10-year- old boy had open wounds.

In his testimony at Wednesday's hearing, Mr. Allen told the judge that parents had an absolute right to discipline their children, and that he advised members of his congregation on how severe the beating should be, based on the infraction, the child's age and degree of remorse.

"When they administer a whipping, if I think a child is being struck too many times for what they have done, I will come and intervene, and tell them I feel that that's enough," Mr. Allen said. "It depends on what they have done."

Children who did not express remorse should be punished more severely, he said.

All of the church members are black, and Mr. Allen, 68, said: "If the white society doesn't want to whip their children, that's their business. I'm not trying to make you black, so don't try to make me white."

Investigators also found that several 14- and 15-year-old girls had been ordered to marry after they became pregnant or began having sex. The weddings were often performed in Alabama, where girls may marry at 14.

Mr. Allen confirmed the practice on Wednesday, saying it was better for young teenagers to be married than to become "whores."

Officials said they were not sure whether the marriages were legal in Georgia, where people must be 16 to marry.

"If they tell me I'm going out there anyway and having sex with different ones, I believe it's best for them to have sex with their husbands, and have babies by their husbands only," Mr. Allen said.

Mr. Allen has preached his fierce and literal interpretation of the Bible's teachings at the small church for 35 years, and members — there are currently about 130 — say they rely on his advice for many major decisions. In 1993 he was jailed for 30 days after ordering a 16-year-old girl whipped with belts, a beating that he acknowledged may have lasted half an hour.

Tanyaneeka Barnett, 25, a former church member, testified yesterday that teenage girls who had sex were frequently whipped during church services, after removal of their skirts or dresses.

Mr. Allen angrily denied that sexual abuse had occurred. The church was simply trying to prevent the kind of social disorder that had led to school shootings and rampant teenage pregnancy, he said.

"When the child is an adolescent, they are not able to think for themselves how to conduct themselves," he said. "So a parent has to be an authority. Someone with a more mature mind. You have to have rules."