Dr Michael Marshall, the Anglican bishop of Woolwich, has not given up hopes of setting up a "Christian commune" in Lewisham, South London despite having to abandon his first plans because the house was unsuitable.
The decision to pull out was taken this week after it became clear that there was not enough money available to make the necessary repairs to the old rectory where the community was to live.
A spokesman for Dr Marshall commented: "Obviously the bishop is very disappointed but there was no point in going on with a building that was unsuitable. It is foolish to knock your head against a crumbling brick wall."
Plans for the "Open Household" were revealed in March when Dr Marshall said that he was dissatisfied with his lifestyle as "a private person in a private house in a private road" in an exclusive part of Dulwich.
They ran into difficulties last month when a detailed survey of the house in Lewisham, pictured above, revealed extensive dry rot and other damage to the roof and fabric. It needed an extra £40,000 on top of the original needed for conversion.
The spokesman said that those who had given money for the scheme had been notfied of the decision and had had their donations returned. In some cases they had told the Trustees to keep it while they looked for another house.
The search will now continue in the area, though it is expected to be some time before another is found. £25,000