PARISHES in the NSW diocese of Bathurst have been asked to raise funds to pay the diocese's legal costs in defending itself against a court order forcing it to repay a debt of $25 million to the Commonwealth Bank.

The debt was incurred by financing two church schools. The funds raised by the sale of the schools, in Orange and Dubbo, were not enough to repay the debt.

The Bishop of Bathurst, the Rt Revd Ian Palmer, said that selling church property would undermine the Church's ministry, because "we will be left with nothing. . . It is our duty to defend those properties . . . for the benefit of the community."

Bishop Palmer and his predecessor, the Rt Revd Richard Hurford, have been named in legal proceedings brought by the receivers of the diocese's development fund. The fund acted as the financial intermediary, lending the schools money that it had borrowed from the bank.