The bishop of London has offered to organise a debate between anti-capitalist protesters camped outside St Paul's Cathedral and figures from "across the political and business spectrum", but only if the demonstrators disband peacefully.
Richard Chartres, the third most senior cleric in the Church of England, said he and the dean of St Paul's, the Right Rev Graeme Knowles, would be available on Sunday morning to engage with people from the Occupy the London Stock Exchange movement.
It would be the first such meeting between the two parties since protesters set up base outside the cathedral 12 days ago. A court injunction prevented them from occupying nearby Paternoster Square.
The tent city led to the London landmark's closure last week on health and safety grounds but it is due to reopen on Friday afternoon after Occupy London rearranged the camp's layout.
Protesters have given no indication about if or when they intend to leave, despite requests from the cathedral, the City of London Corporation, the London mayor and Chartres, who lives across the road.
Writing in the Evening Standard, the bishop said: "Calls for the camp to disband peacefully have been deliberately interpreted as taking the side of Mammon, which is simply not the case.
"The original purpose of the protests, to shine a light on issues such as corporate greed and executive pay, has been all but extinguished – yet these are issues that the St Paul's Institute has taken to heart and has been engaged in examining. The time has come to change the setting. Now that St Paul's can function again, albeit on a limited basis, the cathedral wants to help recapture the serious issues.
"If the protesters will disband peacefully, I will join the dean and chapter in organising a debate on the real issues here under the dome. We will convene a panel from across the political and business spectrum and will invite the protesters to be represented. The dean and I will be available on Sunday morning, outside St Paul's, to listen and engage. Our message will be simple: pack up your tents voluntarily and let us make you heard."
Earlier the cathedral's popular and high-profile canon chancellor, Giles Fraser, resigned over plans to forcibly remove protesters from its steps, saying he could not support the possibility of "violence in the name of the church".
Fraser, a leading leftwing voice in the Church of England, said he had stepped down because he could not sanction the use of police or bailiffs against the hundreds of activists who have set up camp in the grounds of the cathedral in the past fortnight.
"It is with great regret and sadness that I have handed in my notice at St Paul's Cathedral," he said on Twitter.
Fraser, who was appointed canon in May 2009, told the Guardian: "I resigned because I believe that the chapter has set on a course of action that could mean there will be violence in the name of the church."
A special service will be held at St Paul's on Friday lunchtime to mark its reopening. The dome and galleries will remain closed for the time being but the cathedral itself will be open for worship and visitors.
Canon Michael Colclough said: "We are delighted that we have been able to get to this point and the cathedral, even now, is being prepared for tomorrow which is the feast day of St Simon and St Jude.
"Prayers have been offered for the whole situation since it began but we will certainly be remembering all those involved in the events of the past week and praying for a peaceful outcome."
Fraser's exit has, so far, provided the most turbulent moment in the standoff. Chartres was among those to express regret at his departure.
"I heard, with regret, the news of Giles Fraser's resignation from the chapter of St Paul's this morning and I have now contacted him. His is an important voice in the church and I have offered to meet him immediately to discuss how we can ensure it continues to be heard," the bishop said.
Knowles, too, said he was "very sorry" to see Fraser go. "Giles has brought a unique contribution to the life and ministry of St Paul's. He has developed the work of the St Paul's Institute and has raised the profile of our work in the City. We are obviously disappointed that he is not able to continue to his work with chapter during these challenging days. We will miss his humour and humanity and wish Giles and his family every good wish into the future."
Fraser quickly became a hero figure among the Occupy London movement, clearing police officers off the steps of St Paul's and supporting the group's right to peaceful protest. He delivered a Sunday sermon decrying corporate greed, which was seen as another sign of his endorsement of the protest.
Occupy London said it was "deeply moved" to hear of his resignation. "He is man of great personal integrity and our thoughts are with him," it said.
"He respected our right to protest and defended it. For that we are very grateful, as he ensured that St Paul's could be a sanctuary for us and that no violence could take place against peaceful protesters with a legitimate cause – challenging and tackling social and economic injustice in London, the UK and beyond."
A spokeswoman, Naomi Colvin, added: "Courage like that is really very inspiring. It reassures us that what we're doing is important. The people who have a bit of integrity, it's becoming more obvious who those people are. I hope we can do well enough to justify their sacrifices."
Some at St Paul's are said to be unhappy about the increased pressure from the City of London Corporation and the London mayor, Boris Johnson, to have the protesters removed. The corporation, which is the local authority for the Square Mile, is meeting on Thursday to discuss plans for any eviction. A formal meeting will take place on Friday, when its planning and transportation committee considers advice on how to resolve the deadlock.
It is understood the cathedral agreed on Wednesday afternoon to support this action, making the prospect of forcible eviction more likely.