The Church of England is to investigate its stake in a US venture capital fund that has invested millions of dollars into payday lender Wonga. 

The link was exposed by the Financial Times after the Archbishop of Canterbury, the Most Reverend Justin Welby, said the Church planned to "compete" the payday lender "out of existence".

The Financial Times found that Church of England's £5bn pension fund holds an investment in Wonga backer, Accel Partners.

The Church of England's investment policy excludes companies engaged in payday loans.  

A statement issued by Lambeth Palace said the Wonga link represented a "serious inconsistency of which we were unaware". 

"We will be asking the Assets Committee of the Church Commissioners to investigate how this has occurred and to review the holding in this pooled investment vehicle," the spokesperson said.

"We will also be requesting the Church Commissions to investigate whether there are any other inconsistencies as normally all investment policies are reviewed by the Ethical Investment Advisory Group (EIAG)."

In an interview with Total Politics published this week, the Archbishop said he had met with Wonga boss Errol Damelin and told him: "We're not in the business of trying to legislation you out of existence, we're trying to compete you out of existence."