The archbishops of Canterbury and York were today delivered a resounding snub to their plans to centralise power in the Church of England.

The General Synod, being held in York, overwhelmingly rejected the proposals which would have made Dr Rowan Williams one of the most powerful Archbishops of Canterbury since the Reformation.

Church bodies responsible for education, mission and finance were to have been abolished with the powers of the Church’s main boards and councils instead passing to Canterbury and York.

But tonight the laity, clergy and even some bishops threw the plans out in a rebellion that will keep the balance of power within the democratically elected Synod.

The rebels had warned that the centralising changes would turn the established Church into a medieval style of government more akin to a “Muslim-style theocracy”.

The rejection came despite the Archbishop of York, Dr John Sentamu, delivering a stark warning to synod members that they were in danger of forgetting their priorities.

Preaching at York Minster at the Eucharist this morning he had said: "The big priority for all of us is an unceasing renewal of commitment to Christ. Sometimes in the complexity of the activities of the Church we are so busy with committees, synods, administration and making the wheels go round that we are in danger of forgetting that none of these things matters, if it is carried out by people who have not been with Christ before they have been with others."

He added: "The idols of earthly wealth and power, the blessings people make for themselves, which are widely worshipped and highly exalted, degrade their devotees."

The radical plans had been drawn up as part of a series of measures designed to create a leaner Church better fitted to cope with falling attendances, a pensions black hole and plummeting asset values.

There is a £352 million shortfall in clergy pensions and after the Church Commissioners, who manage the Church of England’s investments, announced that the value of its portfolio shrank to £4.4 billion during 2008 compared with £5.7 billion the year before.

The rejection of the centralisation plans also casts doubt on another motion before the Synod proposing that the number of bishops be cut so the number of top-level clerics reflects the fall in full-time stipendiary clergy. There are now about 8,000 stipendiary clergy, a fall of about a quarter over two decades.

There are currently about 110 episcopal posts including the 44 diocesan bishops in the Church of England. The rest are suffragan or assistant bishops.

Other senior clergy posts include between 100 and 110 archdeacons and 42 cathedral deans as well as cathedral canons.

A briefing note prepared by the Bradford Diocesan Synod said the Church Commissioners spent £7.3 million in maintaining diocesan bishops' houses in 2008 and £14.5 million in grants for bishops' support staff, office and working costs.

Together with deans and canons of cathedrals and archdeacons they make up a body of senior staff that has remained largely unchanged in number for 50 years.

However, in the same period the number of junior clergy has plummeted, with parishes merged throughout the country and some clergy ministering to half a dozen or more country churches, racing between churches on Sunday mornings to pack in as many Eucharists and morning prayer services as possible.