A DISPUTED decision by the Church Commissioners to move the residence of the Bishop of Bath & Wells from the historic Palace in Wells has been overturned by the Archbishops' Council.

The announcement follows a campaign of opposition to the move by the diocese, the Palace Trust, and the MP for Wells, Tessa Munt, who presented a petition signed by 2000 people to the House of Commons earlier this year.

The announcement was made on Thursday of last week, by a committee that had been appointed by the Archbishops' Council to review the objection to the move made by the diocese's Bishop's Council earlier this year (News, 28 March).

The Church Commissioners, who announced the proposed move in December last year (News, 31 January), had failed to satisfy the committee that the decision to move the Bishop was the right one.

The Bishop will now continue an 800-year-old tradition by living in the Palace.

The Church Commissioners were reprimanded by the committee: the consultation had been flawed, it said, and public discontent hadbeen "exacerbated" by the Commissioners' response to it.

Last week, the chief executive of the Palace Trust, Rosie Martin, said: "This reversal of such a major decision is unheard of. . . There is a palpable sense of excitement."

The Bishop of Bath & Wells, the Rt Revd Peter Hancock, was appointed in December, and will be enthroned in June. Last week, he said that the disagreement over his future home had been "quite difficult", but he was "wholly committed to my new ministry".

He said: "The Palace will be at the heart of my ministry as the place where I study, pray, and work, alongside the Bishop of Taunton. I'm very privileged, and look forward to working with the trustees and all those who work hard to make the Palace such a wonderful place to be."

Ms Munt said: "I'm absolutely delighted that the Archbishops' Council has been just and fair, and made a common-sense decision which will be welcomed and supported by the whole diocese. The city of Wells will give a collective jump for joy, and can't wait to welcome the new Bishop and his family to his house in the Palace."

The committee appointed by the Archbishops' Council comprised Mary Chapman, Philip Fletcher, and the Archdeacon of Rochdale, the Ven. Cherry Vann. They met on Monday and Tuesday of last week, in Wells, to hear the objection to the Church Commissioners' decision. This was the first time that such an objection had been raised under section 7 of the Ecclesiastical Offices (Terms of Service) Measure 2009.

Opposition to the Commissioners was voiced at the General Synod meeting earlier this year (Synod, 21 February), during which the Third Church Estates Commissioner, Andrew Mackie, was told that the matter had become a "débâcle".

The Church Commissioners reiterated the argument that the move was designed to ensure the new Bishop's privacy, and that he should not be "encumbered or restricted by being housed in a place with a high level of public access".

They had planned that the Bishop should live in the Old Rectory, Croscombe, which they bought for £870,000 earlier this year. It was sold in 2007 by the diocese of Bath & Wells for £750,000. In February, Mr Mackie argued that this was "not £870,000 that has been frittered away never to return, that could be used on other things. It's an investment."

No decision about the future of the Old Rectory has yet been made. The statement from the committee on Thursday of last week said that it "cannot be considered as providing accommodation which is reasonably suitable as a residence for the Bishop, even on a temporary basis". The committee's main objection was that it was not in Wells.

The committee did not agree, however, with those who had criticised the purchase of the Old Rectory as "representing poor value for money. . . We accept the Commissioners' assertion that it represents an attractive investment asset."

The committee's ruling says that the Commissioners' concerns about the Bishop's privacy at the Palace were "significantly overstated". It is critical of the Commissioners' approach to consultation: "A proper recognition of the needs of the Church and the wider community in the diocese should have led them to carry out a wider and earlier consultation exercise in the present case. We were surprised that the Bishop's Council was not involved in such consultation as was carried out."

It also notes: "The level of public discontent has been exacerbated because the Commissioners felt unable to declare from the outset the reasons for their decision."

The committee has emphasised, however, that the decision should not form a precedent.

"Whilst very few diocesan bishops still live in a historic palace, we had a strong sense that it was important to the city and the diocese more widely that the Bishop should at least live within the community of Wells and be seen to go about it. . . We would not wish this particular set of circumstances to be taken as a pattern for any future such cases."

The overwhelming majority of diocesan bishops do not live in palaces. In recent years, the Bishops of Worcester, Carlisle, and Durham have all been moved from their historic residences.