The first female Bishop of London has weighed into the debate about the church embracing the LGBT community.

Former midwife Sarah Mullally, 55, was yesterday appointed to serve as the Bishop of London – the third-ranking role within the Church of England, behind the Archbishops of Canterbury and York.

Mullally, who has previously served as Bishop of Crediton in Devon, was appointed to the key role – reflecting the church’s growing modernisation just a few years after women bishops were first approved.

But the jury is still out on how far that modernisation will go, as the Church continues to be divided over proposals to become more LGBT-inclusive, and potentially bless same-sex unions.

Conservative evangelicals within the Church have threatened to break away if there is any move towards inclusivity, while moderates warn the Church’s anti-LGBT stance risks alienating people across the country.

When the Evening Standard asked the Bishop about LGBT people, she said: “Nobody is outside the love of God.”

She added that the issue impacts “the whole of the Anglican communion”, but that “this question is about people, and nobody is outside the love of God”.

The Bishop added: “London reflects a diversity of views and everybody can find spiritual home in London. I’m chairing one of the committees which is reflecting on our teaching and tradition on this issue.

“I can’t give a sense where this reflection is going to go, but it’s important to stress that everybody is loved by God.”

She was also pressed on the issue during an appearance on the BBC Today programme.

Asked if she would support the proposals to modernise, she said: “At that point I won’t be in Synod, so I won’t have a vote.”

However, she said: “What we have to remember is this is about people, and the church seeks to demonstrate love to all, because it reflects the God of love, who loves everybody.

“At the moment the Church is taking a period to reflect and there is work that is going on. I am involved in that, and for me it is important that we take time for reflection, while standing on the traditions of the Church of England.”

She added that while “there is no provision within the Church of England” for same-sex couples to marry, “there is a period of reflection that is going on and I am part of that”.

However, she deflected questions about anti-LGBT bishops within her new diocese.

The Revd William Taylor, the Rector of St Helen’s Bishopsgate, has threatened to back a split in the church if the new Bishop does not “condemn homosexual relationships as sinful”.

Before the Bishop was appointed, he had said: “We now wait to see what the new Bishop of London’s views are.

“My first question to him or her will be: ‘Are you prepared to openly to declare as sin what God calls sin and to summon all people to repentance and to do so publicly?’

“If the answer is ‘no’ then there is an ‘unavoidable avoidance’ for us all.”

He added: “Somebody like the Bishop of Hereford, or the Bishop of Buckingham, who flatly publicly denies the teaching of the Lord Jesus on marriage and sexual morality, is a self-serving man, an arrogant man who will not sit under the teaching of the Lord Jesus.”

Asked about Taylor’s views, Bishop Mullally deflected: “What we have to recognise is there’s a real diversity within the Church of England.

“If we are going to take seriously the wish of the two Archbishops, we need to allow that process of reflection to go ahead.

“I have been very encouraged by those who wish to work with us on that, but at the same time we do have to recognise that this is a challenge for all people in the Church, on how we manage difference and diversity.

“There is a sense in which you have to compassionately deal with these issues, and I am encouraged that the Church across London is undertaking a whole series of things in communities to be welcoming of that diversity.”

At the Church of England’s General Synod earlier this year, a number of key concessions were made to modernisers on LGBT rights.

The Synod overwhelmingly voted to demand a ban on ‘gay cure’ therapy, and also passed a motion that would ‘welcome and affirm’ transgender people as their preferred gender.

However, gay clergy still face active discrimination within the Church if they choose to marry.

And the Church maintains a ban on same-sex unions and blessings for same-sex couples.

A group of clergy recently sent a letter to the Telegraph threatening a formal split over LGBT issues.

The signatories include Rev Dr Gavin Ashenden, who served as special chaplain to the Queen from 2008 until earlier this year.

Ashenden has already personally quit the Church of England, resigning from his position in protest of the acceptance of “values that are anti-Christian”.

The letter says: “Recent actions in the General Synod in pursuit of a culture that denies biblical ethics (…) have caused many Anglicans great concern.

“There are times, particularly in the face of social disintegration, when it is the duty of the Church to be counter‑cultural. The failure of the House of Bishops to uphold the teaching of the Bible and of the Universal Church in this area is very disappointing, if not surprising.”

It adds: “Booing of traditionalists and the levels of personal abuse aimed at them during the Synod have only deepened mistrust between the different sides.”

The letter threatened a split within the church, saying: “There are now effectively two opposed expressions of Anglicanism in this country. One has capitulated to secular values, and one continues to hold the faith ‘once delivered to the saints’.”

The letter notes the split in the US and Canada, where a number of parishes severed ties with the Episcopal Church and the Anglican Church of Canada over LGBT-friendly reforms.

The letter says: “We note the results of this same conflict in North America, even as we look for and pray for a similar renewal of orthodox Anglicanism and of Anglican structures in these islands.”

It was also signed by the former Bishop of Rochester, Rt Rev Michael Nazir-Ali, Rev Dr Andrew Symes of ultra-conservative campaign group Anglican Mainstream, and Andrea Williams of anti-LGBT lobbying group Christian Concern.

But the Speaker of the House of Commons recently called on the Church to embrace equal marriage.

He was echoed by Education Secretary Justine Greening.

She said: “I think it is important that the Church in a way keeps up and is part of a modern country. I wouldn’t prescribe to them how they should deal with that.

“But I do think we are living in a country where people broadly recognise that attitudes are in different place now to where they were many, many years ago.”