The bronze sculpture, called 'The Homeless Jesus', which should've been at the front of the church in Westminster, was by the City of Westminster Council.
Revd Dr Martyn Atkins from Methodist Central Hall told Premier: "We've started a petition, what we're asking people to do is simply signal through that petition that they believe Westminster City Council have made a poor decision in saying that this sculpture shouldn't be located here, outside Westminster Central Hall.
"One reason has been given by the council, and that is that in this particular congested central area of London there seems to be a lot of statues, they call it a saturation zone."
'The Homeless Jesus' has been created by sculptor Timothy Schmalz and shows a life-sized figure of Jesus sleeping on a park bench covered with a blanket, with his exposed feet bearing the nail marks of the crucifixion.
Mr Schmalz described the work as "a visual translation of core Christian values."
'Homeless Jesus' gained international fame in 2013 when Pope Francis blessed the model and stated that is was a "beautiful and excellent representation" of Jesus.
Permission has recently been given for 'The Homeless Jesus' to be located in The Vatican in Rome, and there are other sculptures of it around the world in Toronto, Washington DC and Madrid.
Revd Dr Martyn Atkins concluded: "Homelessness is increasingly a global issue, and we are witnessing what many say is the largest ever migration of people in Europe and North Africa.
"London is a leading world city and the positive symbolic effect of placing 'The Homeless Jesus' here in Westminster would be enormous.
"As a church we are extremely disappointed at the refusal of this application.
"We're led to the unfortunate conclusion that a sculpture of Jesus, depicted as homeless, isn't welcome in Westminster and so close to the Houses of Parliament.
I hope that Westminster City Council will reconsider and see the positive impact that The Homeless Jesus can have in drawing public attention to the plight of homeless and dislocated people."
A Westminster City Council spokesperson said: "We welcome public art and sculptures in Westminster.
"However, there are traditionally a large number of applications for monuments and memorials in Parliament Square and the surrounding area and it reached saturation point some years ago when the council introduced a policy of no further statues being allowed in this area.
"The council feels that in respect of this application an exception is not warranted.
"The applicants have been consistently advised that the statue needs to be located elsewhere."
"For example, there is no objection whatsoever to the sculpture being located within the Methodist Central Hall itself."
Listen to Premier's Hannah Tooley speak to Revd Dr Martyn Atkins here:
