All Souls Church London is pausing its payments to the diocese until a decision is made on the same-sex blessings debate.
In a letter to the Bishop of London, the church challenged the House of Bishops' motion for proposed Love and Faith prayers at General Synod, saying they teach "every sexually active unmarried couple that repentance is not needed."
On Monday, the Rt Rev Sarah Mullally presented the Church of England's proposal to bless couples in same-sex unions at its national assembly, ahead of a large debate on Wednesday.
The Parochial Church Council (PCC) of All Souls London, Langham Place wrote to Bishop Sarah ahead of Synod, to express that they felt such blessings were a "departure from biblical Christianity" that the church could not participate in.
"We are writing to express our concern and sadness at the response that has been presented by the House of Bishops as the outcome of Living in Love and Faith.
"Both the response and the draft prayers abandon confidence in the goodness and authority of God's Word and in doing so they move the Church of England away from her historic formularies, which are foundational to our life together in London, England and as part of the global Anglican Communion."
The PCC say that although there has been no change to the Church's biblical doctrine on marriage, prayers of blessing for same-sex unions changes its doctrine "in practice."
They argue that the prayers wrongly devalue members of the church who are same-sex attracted and abstaining from sex outside of marriage and do not address the biblical call to repent from sin.
"Church has too often been a place where people feel unable even to say they are same-sex attracted or struggling with gender identity and we need to work hard so that is no longer the case.
"But church has also been a place where people find freedom through finding their identity in Christ, joy in knowing unconditional love and peace in the forgiveness of Jesus. All of us are fallen and sinful and we all are called to repent before the Lord Jesus," the PCC added.
"As drafted, the prayers of Love and Faith now teach every sexually active unmarried couple that repentance is not needed. If believed, this denies people the joy of stepping away from those things God has called sinful and into new life with him. We cannot participate in such a departure from biblical Christianity."
The PCC said they were left in a "difficult position with regard to episcopal oversight" and have voted to pause all common fund payments to the diocese of London until a 'known outcome' of General Synod had been reached.