As a row of purple-clad gay and lesbian churchgoers sat quietly watching in the public gallery, the Sydney Anglican Synod on Monday night voted in favour of a policy that will prevent same-sex marriages, parties or events that might advocate "expressions of human sexuality contrary to our doctrine of marriage" on about a thousand church-owned properties.

The policy will apply to all future leases to tenants on church property, all parishes, church halls, Anglican schools, counselling services nursing homes and Anglican corporations, and all members of the boards of those bodies will be expected to uphold a "Christian ethos" that hews to a traditional view of marriage and sexuality.

In the face of strong opposition to the proposed policy over the weekend, several amendments were made and the mover of the bill, Bishop Michael Stead, apologised to Indigenous Australians for failing to properly consult with them on smoking ceremonies, to LGBTQI people for failing to spell out that different points of view could still be aired, and to transgender people who "heard they were not welcome in our churches".

Bishop Michael Stead says the new property policy aims to protect churches from claims of discrimination. ( Supplied: Anglican Media Sydney )

New words added to the policy make clear it should not "prevent discussion and debate about contentious issues on church property".

In response to a question in synod about whether this meant the church "hated gays", chair of the Religious Freedom Reference Group, Bishop Stead, said: "We want to say as clearly as we possibly can that all people are created in the image of God, all people are loved by him, all people are welcomed in our churches."

The bill was intended primarily as "a shield, not a stick", he said — a necessary protection against being accused of, or sued for, discrimination under anti-discrimination legislation in a world he described as increasingly at odds with the conservative Christian world view.

"To rely on existing anti-discrimination exemptions, a religious institution must demonstrate that its actions conform to the doctrines, tenets or beliefs of that religion," Bishop Stead said.

"To ensure that the courts know what our doctrines, tenets or beliefs are, we need a clear articulation of our doctrines."

Policy aims to 'shield' church from discrimination claims

The new policy, he said, would provide a new protection to, for instance, a warden who wished to decline a request to hold an anniversary party for a same-sex couple in a church hall.

"I am aware of at least one church which ceased all external hiring of their church hall based on legal advice that they could be in breach of anti-discrimination legislation if they refused to hire to certain groups and not others," Bishop Stead said.

"These policy and ordinance address this problem … It is a shield to protect them from claims of discrimination or from other external pressure."

Several synod members spoke to oppose the property use bill, lamenting the perceived negativity of the message, and the potential for reputational damage to a church they said they worried was losing relevance.

The Reverend Daniel Dries from The Christ Church St Laurence said he feared the Sydney Anglican Church was "rapidly developing an image crisis second only to the Liberal party in the seat of Wentworth".

"When our reputation in society inhibits our ability to share the gospel we should be worried", Dr Dries said. "If we continue to damage our reputation we will become completely ineffective."

He also questioned what message would be sent to the local community if halls that were once freely open remained locked most days, and urged the synod to consider using empty church spaces to house refugees or victims of domestic violence.

"What concerns me about this policy is that its language is so dominated by what we as a diocese oppose, that it completely fails to identity what we stand for," he said.

It makes the church look 'mean and insular'

It was a view supported by Father James Collins from Burwood, who said the policy made the church look "mean and insular".

Some parishes were going backwards, church leaders were becoming burnt out and the Wentworth by-election had shown Australians were tired of divisive politics, he said.

"I wish the Ruddock review had left the status quo as it was. We as Christians in Australia have unbelievable freedoms," he said.

LGBTQI churchgoers watch as the Sydney Anglican Synod debates its controversial property policy. ( ABC News )

But other speakers described the measures as simply clarifying the church's doctrinal position so they may be better protected legally, following a court case that found the onus was on churches to spell out their fundamental beliefs in order to avoid anti-discrimination charges.

Anglican Sydney Diocesan Secretariat CEO Robert Wicks said the diocese should not be ashamed of its decision, and should be free to decide if and how it responds to changes in the broader society.

"What is stated here [in the policy] as far as I can see has been the case [for] 10 years, 20 years, 50 years … we are not the ones who are changing. It is the world around us that is changing … and all we are doing is saying 'no'."

Sections of the Ruddock review into religious freedom protections, commissioned after same-sex marriage was legalised last year, have been leaked. But the final report has not yet been released by the Government.

So what will change?

Lawyers consulted by the ABC said many questions remained about the application and potential consequences of the new ordinance.

Those who will be affected include board members of all Anglican schools, Anglicare (including aged homes), YouthWork and other Anglican corporations.

Bishop Stead told the synod that currently all members of these boards needed to sign a statement of personal faith, which includes "the declaration that they will fulfil their duties as a board member in accordance with the Christian ethos of the organisation".

This policy now makes it clear, he said, that this view of marriage as being between a man and woman is now part of this Christian ethos.

Asked how the policy might apply in aged-care homes, Bishop Stead told ABC News that while it would not apply to the individual behaviour of occupants, it could prevent the homes from, for example, collectively holding a party to celebrate a same sex wedding anniversary, or a celebratory group screening of the Sydney Gay and Lesbian Mardi Gras Parade.

"They can do whatever they like in the privacy of their own home. It is what happens in the common areas and what is the policy of the centre," he said.

"This policy would give the centre the rights to be able to say we are not going to allow it for that purpose. It doesn't say they have to, but it gives them the right to do that and it not to be discrimination under the anti-discrimination act."

It also would not prevent a counselling service on church-owned land from having LGBTQI clients, Bishop Stead said.

But there could be a problem if, "the counsellor said, 'I'm only going to take LGBTQI clients and I'm going to counsel according to a particular ideology that is contrary to Christian belief'".

Counselling contrary to church doctrine 'not OK'

While counsellors should respond "in the appropriate professional way", he said it would be hoped that if a client was struggling with their sexuality, that the tenor of the advice given would be in line with beliefs that lifelong celibacy is the only alternative to heterosexual marriage.

A counselling service that was "contrary to our doctrine" on matters like "transgender ideology" would not be OK, he said.

"If a counsellor said, 'my practice is to actually be encouraging young children who are gender incongruous-dysphoric', what I want to do with them is to encourage them to transition' … that would be something [that] is really in tension with what we think is God's best purposes for human beings."

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Asked what advice should be given to an LGBTQI person, Bishop Stead said he was not a counsellor, but: "I would hope they would say to an LGBTQI person, 'as a Christian I want to affirm you are loved by God, that you are made in God's image and God made you as you are.

"God has made all of us with desires that can't be fully satisfied in this world [and] for some people that is more of a struggle than for others.

"For single heterosexual Christians that is a struggle — they have desires but the Bible is pretty clear about this: Unless they are married they can't act on desires in sexual ways.

"Likewise, for you, if you want to follow Jesus, your struggle will be similar to the heterosexual Christian. In fact, it probably is harder for you because at least the single Christian has the prospect of marriage in the future."

While all future commercial leasing arrangements will be revised in light of the new policy, Bishop Stead said he was confident the impact would be minimal.

The test will be: "The purpose of the enterprise, not the moral standard of the individual."

Gay Anglicans disappointed but hopeful

Steff Fenton, co-chair of the Christian LGBT lobby group Equal Voices, said she wasn't surprised that the synod had voted in favour of the policy but was happy some amendments had been made before it was put to vote.

"As a gay Anglican who knows many people in the synod personally, I can't help but feel disappointed," she said.

"However, I was very thankful for the removal of the 'advocacy of transgender ideology' clause."

Joel Hollier and Steff Fenton say they are optimistic the new policy will open up discussion in the church about LGBTQI issues. ( ABC News )

Co-chair of Equal Voices Joel Hollier said he was "cautiously optimistic" the policy would open up discussion in the diocese about LGBTQI issues.

"Michael Stead made it clear that gender and sexuality is still grounds for discrimination within the church but we know that we are not going to change that in one synod … but we're opening discussion for recognition and I think that's a good first step," Mr Hollier said.

"There is potential for this type of policy to focus on the negatives. We want LGBTQI people to see a really positive side of the church that we know exists and we'd love to see that from the leaders.

At synod Bishop Stead also apologised to Indigenous people for failing to consult properly on the proposed banning of "spiritually inconsistent" smoking ceremonies that, after drawing strong criticism from elders, had been removed.

"On wider advice from Aboriginal Christians, we realised that we need to consult more widely because the spiritual significance of smoking ceremonies differs in different places," he said.

"Moreover, this discussion needs to be part of the wider conversation about reconciliation between the first peoples of this country and its later arrivals, and needs to be driven by indigenous Christians."

Unanswered legal questions

Cathy Sherry, an associate professor at the University of New South Wales and an expert on strata and community title, said the diocese's new policy raised a series of difficult questions.

She said all property owners — including churches — should be able to refuse to lease their property to people who are promoting views with which they strongly disagree, but that it was "hard to know where to draw the line".

"Anti-discrimination legislation generally draws that line well," Dr Sherry told ABC News.

"For example, it says that no matter how strongly you believe that people should not have inter-faith, inter-racial or same-sex marriages, you are not entitled to refuse them goods and services, including wedding cakes or hall hire.

"Churches, mosques and synagogues should have some exemptions, but whether that includes all their properties is not clear."

It was crucial, Dr Sherry added, to remember land is both finite and essential.

"If there is only one hall in a country town, and people are excluded from holding a yoga class or celebrating a same-sex marriage in it because of church rules, they will struggle to live their lives as they want to," she said.

"It's a cliche, but we need to be aware of the slippery slope. If all property owners only leased land to people whose views accorded with their own, social and economic activity would be seriously curtailed.

"If religious institutions have large land holdings — and they are large in sectors like retirement villages — these rules could have real and detrimental impact."