The Church of England is backing down in a row with the country's best-known composers and musicians.

St Sepulchre's Without Newgate, in Holborn, central London, is known as the Musicians Church and has been a regular concert venue and rehearsal space for some of the UK's top orchestras for decades. The ashes of Sir Henry Wood, founder of the Proms, lie in its north chapel, but the church became embroiled in a dispute after it announced the building would close its doors to 'non-religious' hirings.

The vicar David Ingall comes from the charismatic megachurch Holy Trinity Brompton (HTB) and wanted to use the space to focus on church activities and outreach events.

But now the acting Bishop of London, Pete Broadbent, has intervened and insisted the building will remain open for 'major flagship concerts' and rehearsals beforehand.

In dealings with Ingall, Bishop Broadbent said he had 'repeated and re-inforced the role the Church of England plays in the communities it serves. The Church of England is called to be a welcoming, inclusive, and engaging church. I have re-emphasised the importance of this to all those at St Sepulchre.'

In a statement released on Thursday he also said there were many other churches nearby in the City of London can provide a space for musicians.

'Although St Sepulchre has for many years been the spiritual home of the National Musicians' Chapel, and will continue to be so, many of our churches can rightfully claim to exercise a role as a musicians' church,' he said.

A new website musicianschurch.org will be launched to help concert organisers book church space across London, including in St Sepulchre's.

Ingall thanked Bishop Broadbent for the statement which he 'totally endorses' and apologised for the upset. 

'We have tried to get the balance right in our activities, and we have tried to communicate our passion for music. We have not always succeeded. I regret that and where we have caused upset, I and the PCC, are sorry,' he said.

He went on to attack the media coverage and said it ignored the positives the church was doing.

'It's disappointing that much of the debate in recent days has focussed on the negative of a cancelled hiring programme in one church, rather than the wider role the church continues to play,' he said.

But others have criticised Ingall for failing to engage and soften his stance more. 

'It is regrettable that the Revd David Ingall and the PCC [parochial church council] of St Sepulchre's have not changed their position despite huge pressure from the musicians' community, the Diocese of London and the wider Church of England,' said Dr Andrew Earis, director of music at St Martin-in-the-Fields, and former director of music at St Sepulchre's.

'Whilst they have offered positive proposals towards a more significant in-house music programme, they have confirmed that the church will be closed to outside hirers. Church rules mean that it is very difficult, if not impossible, for anyone to overrule this decision.'

In a strongly worded statement he praised Bishop Broadbent's 'tireless' efforts to engage with the parish but he was 'distressed by the damage that this is doing to the Church of England' adding St Sepulchre's was doing 'irreparable harm to the Church as a whole'.

He added: 'If St Sepulchre's is unwilling to honour its role as an open and inclusive National Musicians' Church, then now is the time to re-define what the Musicians' Church means beyond St Sepulchre's.'

He went on: 'I look forward to helping to create a new Musicians' Church that welcomes all and is a place where all can thrive.'

Judith Weir, the Master of the Queen's Music, told Christian Today the intervention was 'a thoroughly positive outcome' to the dispute.

'It's always a pleasure to rehearse in St Sepulchre's, and good to know that this will continue to be possible for the time being; many thanks to all concerned for giving this some serious thought,' she said. 'The imminent launch of a website by the Diocese facilitating the use of rehearsal space in its churches is excellent news; a positive outcome from the discussions of recent weeks.'

It comes after a major row over the summer with the country's top conductors saying they felt 'betrayed' and accusing Ingall flying 'in the face of Anglican tradition'.

John Rutter, well-known for his composing and conducting of choral music, said Ingall was 'betraying the community that he purports to serve. He didn't have to take the job at the musicians church if he doesn't like musicians'.

He told the Daily Telegraph: 'What this current vicar seems to be saying is that music is OK so long as it's part of a worship service. The concerts that take place in just about every church in the land, they're not OK, and rehearsals are not OK either.

'That flies in the face of the Anglican tradition.'

He added: 'The Church of England needs all the friends it can get. It shouldn't be making enemies - it's un-Christian.'

A letter against the ban was then signed by more than 50 top musicians including Aled Jones, Julian Lloyd Webber and Judith Weir.

They said the 'abrupt move ... was made without consultation'.

It comes after Ingall wrote to hirers in August to say the decision to stop renting out the space had not been easy but 'we have been conscious of the challenges of using a space dedicated to worship for non-religious hiring.

'Our ministry as the National Musicians' Church continues to be a core part of our church's identity and vision ... While its expression may be changing, that underlying vision remains unchanged.'

Responding to the backlash at the time St Sepulchre's released a statement justifying the decision: 'An increasingly busy programme of worship and church activities has led to ever higher demands on the church space, and the hire space is also shared with the church administration office.'

It had been 'greatly moved by the concern expressed for the musical life of the church. We do wish to reiterate that we remain committed to our ministry as the National Musicians' church. In the coming weeks we will reflect and pray, and consult with members of the musicians' community about how best to fulfil that ministry moving forward.'

Christian Today has approached St Sepulchre for comment on the acting Bishop of London's intervention.