Communion-in-the-hand has been approved by the Holy See as an option for Wales & England, and for many other countries, including Italy. The following are the relevant parts of the documents governing this permission.
In the following documents the citations refer to:
Notitiae (Not.) - the official journal of the Congregation for Divine Worship (which now includes the Congregation for the Discipline of the Sacraments)
Acta Apostolicae Sedis (AAS) - the official record "Acts of the Apostolic See," in which authoritative teaching and legal decrees are published.
SACRED CONGREGATION FOR DIVINE WORSHIP, Letter "En reponse a la demande," to presidents of those conferences of bishops petitioning the indult for communion in the hand, 29 May 1969: AAS 61 (1969) 546-547; Not 5 (1969) 351-353.
In reply to the request of your conference of bishops regarding permission to give communion by placing the host on the hand of the faithful, I wish to communicate the following. Pope Paul Vl calls attention to the purpose of the Instruction Memoriale Domini of 29 May 1969, on retaining the traditional practice in use. At the same time he has taken into account the reasons given to support your request and the outcome of the vote taken on this matter. The Pope grants that throughout the territory of your conference, each bishop may, according to his prudent judgment and conscience, authorize in his diocese the introduction of the new rite for giving communion.
The condition is the complete avoidance of any cause for the faithful to be shocked and any danger of irreverence toward the Eucharist. The following norms must therefore be respected. [My emphasis.
One wonders if this condition is being met.]
1. The new manner of giving communion must not be imposed in a way that would exclude the traditional practice. It is a matter of particular seriousness that in places where the new practice is lawfully permitted every one of the faithful have the option of receiving communion on the tongue and even when other persons are receiving communion in the hand. The two ways of receiving communion can without question take place during the same liturgical service. There is a twofold purpose here: that none will find in the new rite anything disturbing to personal devotion toward the Eucharist; that this sacrament, the source and cause of unity by its very nature, will not become an occasion of discord between members of the faithful.
2. The rite of communion in the hand must not be put into practice indiscriminately. Since the question involves human attitudes, this mode of communion is bound up with the perceptiveness and preparation of the one receiving. It is advisable, therefore, that the rite be introduced gradually and in the beginning within small, better prepared groups and in favorable settings. Above all it is necessary to have the introduction of the rite preceded by an effective catechesis, so that the people will clearly understand the meaning of receiving in the hand and will practice it with the reverence owed to the sacrament. This catechesis must succeed in excluding any suggestion that in the mind of the Church there is a lessening of faith in the eucharistic presence and in excluding as well any danger or hint of danger of profaning the Eucharist.
3. The option offered to the faithful of receiving the Eucharistic bread in their hand and putting it into their own mouth must not turn out to be the occasion for regarding it as ordinary bread or as just another religious article. Instead this option must increase in them a consciousness of the dignity of the members of Christ's Mystical Body, into which they are incorporated by baptism and by the grace of the Eucharist. It must also increase their faith in the sublime reality of the Lord's body and blood, which they touch with their hand. Their attitude of reverence must measure up to what they are doing.
4. As to the way to carry out the new rite: one possible model is the traditional usage, which expresses the ministerial functions, by having the priest or deacon place the host in the hand of the communicant. Alternatively, it is permissible to adopt a simpler procedure, namely, allowing the faithful themselves to take the host from the ciborium or paten. The faithful should consume the host before returning to their place; the minister's part will be brought out by use of the usual formulary, The body of Christ, to which the communicant replies: Amen. [Note: Rome later forbid the Communicant to take the Host themselves.]
5. Whatever procedure is adopted, care must be taken not to allow particles of the eucharistic bread to fall or be scattered. Care must also be taken that the communicants have clean hands and that there comportment is becoming and in keeping with the practices of the different peoples.
6. In the case of communion under both kinds by way of intinction, it is never permitted to place on the hand of the communicant the host that has been dipped in the Lord's blood.
7. Bishops allowing introduction of the new way of receiving communion are requested to send to this Congregation after six months a report on the result of its concession."
Note: The "Summary of Decrees" on confirmation of the decisions of conferences of bishops in Notitiae lists the granting of this faculty to the following English-speaking conferences (as found in AAS and Notitiae):
South Africa, 3 February 1970
Canada, 12 February 1970
Rhodesia (Zimbabwe), 2 October 1971
Zambia, 11 March 1974
New Zealand, 24 April 1974
Australia, 26 September 1975
England and Wales, 6 March 1976
Papua and New Guinea, 28 April 1976
Ireland, 4 September 1976
Pakistan, 29 October 1976
United States, 17 June 1977
Scotland, 7 July 1977
Malaysia and Singapore, 3 October 1977
SACRED CONGREGATION FOR THE DISCIPLINE OF THE SACRAMENTS, Instruction Immensae caritatis, on facilitating reception of Communion in certain circumstances, 29 January 1973: AAS 65 (1973) 264-271; Not 9 (1973) 157-164.
Part 4. Devotion and reverence toward the Eucharist in the case of communion in the hand
Ever since the Instruction Memoriale Domini three years ago, some of the conferences of bishops have been requesting the Apostolic See for the faculty to allow ministers distributing communion to place the eucharistic bread in the hand of the faithful. The same Instruction contained a reminder that "the laws of the Church and the writings of the Fathers give ample witness of a supreme reverence and utmost caution toward the Eucharist" and that this must continue. Particularly in regard to this way of receiving communion, experience suggests certain matters requiring careful attention.
On the part of both the minister and the recipient, whenever the host is placed in the hand of a communicant there must be careful concern and caution, especially about particles that might fall from the hosts.
The usage of communion in the hand must be accompanied by relevant instruction or catechesis on Catholic teaching regarding Christ's real and permanent presence under the eucharistic elements and the proper reverence toward this sacrament.
The faithful must be taught that Jesus Christ is Lord and Savior and that therefore the worship of latria or adoration belonging to God is owed to Christ present in this sacrament. They are also to be instructed not to omit after communion the sincere and appropriate thanksgiving that is in keeping with their individual capacities, state, and occupation.
Finally, to the end that their coming to this heavenly table may be completely worthy and fruitful, the faithful should be instructed on its benefits and effects, for both the individual and society, so that their familial relationship to the Father who gives us our "daily bread," may reflect the highest reverence for him, nurture love, and lead to a living bond with Christ, in whose flesh and blood we share.
Pope Paul Vl approved this Instruction, confirmed it with his authority, and ordered its publication, setting the day of publication as its effective date.
The authority of the Church to permit what in other centuries was freely done and which "by itself" is not contrary to the faith is not in question. If abuses are widespread they are contrary to the mind of the Church as expressed in the Roman documents, and contrary to the devotion expressed in the early Church when Communion was also received in the hand. Withdrawing this permission in our time on account of the abuses is certainly something Rome could do.
This is by Colin B. Donovan, STL
http://www.ewtn.com/expert/expertfaqframe.asp (Click on Liturgy and Sacred Music, and then on Communion in the Hand)