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

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

Athough the clergy are not allowed to sell it or take advantage of it for personal gain, they are guaranteed the house as a home 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 be sold subsequently to pay debts or might even be at risk if victims of child abuse by clergy sued the diocese for compensation.

A majority of bishops voted against the change. The Bishop of Chester, the Right Rev Peter Forster, said that 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.”

He added that to lose local ownership of the vicarage was seen as a chipping away of historic links.

The Rev Paul Benfield, from 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.”

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 remove them.

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 past five years.