A second senior British cleric resigned on Monday over accusations that Church of England authorities were dithering in their handling of an anti-capitalism protest camp outside St Paul's Cathedral in central London.

The Cathedral Dean, the Rt Rev Graeme Knowles, said in a statement that he and colleagues had been under considerable strain and his position had become untenable.

Reverend Giles Fraser, Chancellor of the cathedral, quit on Thursday because he opposed planned legal action against the camp that he said could result in violence being done in the name of the Church.

The protesters, inspired by similar 'Occupy' protests around the world, have been demonstrating for the past two weeks against the excesses of free market capitalism and for greater financial equality -- among a wide range of disparate issues.

They wanted to pitch their tents outside the nearby London Stock Exchange, a symbol of the city's status as a global financial centre, but it is on private land and they were not allowed to rally there.

Instead, some 200 tents have sprung up around the cathedral, many in front of the famous steps on which Prince Charles and the late Princess Diana appeared after their wedding in 1981.

Church authorities have begun legal action against the demonstration but say they want to remove the tents rather than the protesters, whose message many of them support, and stress that they would not condone any violence.

The City of London Corporation, on whose land some of the tents sit, is also taking legal action to remove the camp.

Cathedral clerics have been criticised not only over the possible use of force to break up the camp, but also over their decision to close the cathedral for a week on health and safety grounds, costing it some 20,000 pounds a day in lost revenue.

Since the arrival of the protesters' camp outside the cathedral, we have all been put under a great deal of strain and have faced what would appear to be some insurmountable issues, Dean Knowles, the cathedral's chief resident cleric, said in his statement.

It has become increasingly clear to me that, as criticism of the cathedral has mounted in the press, media and in public opinion, my position as Dean of St Paul's was becoming untenable, he added.

Archbishop of Canterbury Rowan Williams, head of the Church of England and spiritual leader of the 80-million-strong Anglican Communion, said the Dean's resignation was sad news.

The events of the last couple of weeks have shown very clearly how decisions made in good faith by good people under unusual pressure can have utterly unforeseen and unwelcome consequences... he said in a statement.

The urgent larger issues raised by the protesters at St Paul's remain very much on the table and we need, as a Church and as society as a whole, to work to make sure that they are properly addressed.

A third figure at the cathedral, part-time chaplain Fraser Dyer, has also resigned, citing similar concerns to those of the canon chancellor, whose job focuses on education.

Bishop of London Richard Chartres, who runs the diocese and has been asked by cathedral officials to offer advice, described the past week as one of the most challenging in St Paul's recent history.

He said it was prudent for cathedral clerics to explore legal options and it would be very foolish and imprudent to speculate on what would happen in the future.

Protesters expressed sympathy over the resignations but said they were not a reason for the campers to leave.

It's a great shame -- it has not been our intention for them to resign, said Ben Cooper, a 25-year-old engineer. It doesn't make the slightest bit of difference to our campaign, but does give a little faith that there are some good people in the world, he told Reuters.

(Editing by Tim Pearce)