Plans for a £4 billion "land grab" of thousands of rectories and vicarages of the Church of England were thrown out today after members of the General Synod rebelled against proposals to centralise ownership of the homes of clergy.

Church leaders had wanted to vest ownership of the homes of nearly half the clergy, the 4,000 incumbents and their families, into new boards set up under the dioceses. At present, when a cleric is installed into the freehold of a parish, ownership of the vicarage or rectory is vested in him or her.

Athough they are not allowed to sell it or take advantage of this for personal gain, they are guaranteed the house as a home for them and their family until they retire at 70.

The synod heard fears of the symbolic impact of removing ownership of the clergy house from the local parish. Members said they were concerned that the houses could subsequently be sold to pay debts, or might even be at risk if victims of child abuse by clergy sued the diocese for compensation.

Even a majority of bishops voted against the change. The Bishop of Chester, the Right Rev Peter Foster, said the proposal was part of an invidious "centralising tendency" in modern culture.

He said: "Many of our parsonage houses were originally gifts from local people to the benefice. Many memories of that gift are very much alive." Symbolically, he said, to lose local ownership of the vicarage was seen as a chipping away of historic links. "Today, clergy feel vulnerable for all sorts of reasons. Why add to them at this time?"

The Rev Paul Benfield, of the Blackburn diocese, who led opposition to the change, said: "We are risking the homes and security of some 4,000 clergy families for the sake of some doctrinal idea that clergy must not hold property."

Justin Brett of the Oxford diocese said: "It looks like hiding assets. If it looks like a duck and quacks like a duck, it is a duck."

The changes were proposed as part of an overhaul of clergy employment conditions which includes the change of the traditional freehold or job for life to "common tenure", which will give clergy more rights and access to employment tribunals but will also make it easier for bishops to sack them or move them on.

The change on houses would have allowed dioceses to sell them without waiting for a benefice to become vacant. Dioceses have raised £100 million from the sale of vicarages over the last five years.