A BISHOP who challenged Baroness Thatcher over her “divisive” social policies has emerged as a leading contender for the second most important job in the Church of England.

John Gladwin, Bishop of Chelmsford, is believed to be favourite to become Archbishop of York ahead of Graham James, the Bishop of Norwich.

During the summer, the appointment secretaries of the prime minister and the archbishops wrote to bishops asking for suggestions for candidates.

Officials were surprised at the level of interest in Gladwin because he moved from Guildford to Chelmsford only last year and had told friends he expected the post to be his last before retirement.

Gladwin, who is chairman of Christian Aid, is one of the church’s big hitters in the House of Lords. He made a strong speech after the September 11 attacks and has raised serious questions over Britain’s involvement in Iraq.

One senior bishop said: “He will take the archbishops’ council by the scruff of the neck and rescue Rowan (Williams, Archbishop of Canterbury) from the bureaucrats. He is by far the outstanding choice but the problem will be to persuade him to accept.”

In 1988 Gladwin warned Thatcher, then prime minister, that social harmony was threatened by “deep divisions and injustices”.

David Hope, the present Archbishop of York, is leaving next February.

Two other bishops are likely to be considered: Tim Stevens, Bishop of Leicester, and James Jones, Bishop of Liverpool.

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