St Paul's, caught between God and Mammon in tent protest

A banner which reads ''What would Jesus do?'' flies outside St. Paul's Cathedral in London October 31, 2011.

LONDON (Reuters) - St Paul's Cathedral, in the heart of London's financial district, has always occupied a delicate spot between God and Mammon. The tent protest on its doorstep has turned it into an excruciating one.

The domed church, which survived the blitz while London burned in World War Two, has lost two senior clergy over its handling of the anti-capitalist protesters who set up camp over two weeks ago, after being blocked from the nearby London Stock Exchange.

The uninvited guests have ignited a clash between Church of England principles and the practicalities of running London's largest cathedral, which attracts 820,000 visitors from around the world a year.

"It would have been impossible for St Paul's to give full-throated support to the protests," said Paul Bickley, a commentator with religious think tank Theos.

"St Paul's can challenge the City but it can't be against the City. Those bankers are part of its parish," he added.

Money and morality are entangled in a stand-off that has thrust Britain's main Christian church into an unwanted spotlight.

Chris Potter, archdeacon of the St Asaph diocese in Wales, said the authorities had bungled the situation.

"They must get a lot of resources from the City of London. Like all of us, they are compromised," he told Reuters during a visit to the encampment.

Canon Giles Fraser, a senior cleric in charge of the cathedral's ties to the City of London financial district, quit last week after his initial defense of protesters backfired as numbers grew.

The Dean, Graeme Knowles, resigned on Monday after first closing the cathedral doors to visitors and then recanting as daily revenues of up to 20,000 pounds evaporated.

The City of London Corporation, the local authority, was expected to warn protesters on Tuesday that they must move their tents within 48 hours or face legal action.

CORPORATE BENEFITS

St Paul's, rebuilt by architect Sir Christopher Wren in the 17th century after the Great Fire of London, styles itself as a "center for arts, learning and public debate."

Its location in the financial district makes it both a critic and a beneficiary of the largesse of big business.

St Paul's website lists the benefits of corporate partnership schemes including free entry for staff and discounts on conference and entertaining facilities.

It had income of more than 15 million pounds in 2010, most of it coming from admission fees. However, it raised an additional 40 million pounds from charitable donations in the last decade to help restore its white stonework, with global banks such as Goldman Sachs, UBS and HSBC contributing.

Jonathan Bartley, a director of Christian think tank Ekklesia, said the cathedral's unique location heightened the dilemma it faces.

"St Paul's will be very acutely aware of its position, its relationship with the City," he said.

The protests have also exposed contradictions in the position of the Church of England which has major investments in public companies. "They are embroiled in the system they are criticizing," added Bartley.

However, he said the Church of England had missed a golden opportunity to back up its criticism of the excesses of capitalism. "This is their moment and they seem to have blown it," he said.

In his Christmas message last year, Archbishop of Canterbury Rowan Williams, head of the Church of England, accused society's richest people of failing to share the pain of economic crisis and spending cuts. The bearded cleric also courted controversy earlier this year when he criticized the policies of the Conservative-led coalition.

Protesters said the church needed to decide where it stood.

"The church is a large institution which shares a working relationship with the City of London Corporation and government - powerful institutions," said Mark Weaver, 30, a musician.

"They have had to question their role because of their faith, because they should be standing by the people rather than power," he added.

(Additional reporting by Avril Ormsby; editing by Andrew Roche)