The Church of England could soon be investing millions of pounds in industries it has long considered to be morally dubious to raise more money for its struggling parishes.
The Church Commissioners, who manage assets worth £3.9 billion, are reviewing their ethical investment policy to ensure that they are maximising their returns. Clerical insiders admitted that any significant changes could prove controversial among the General Synod, who are sensitive about the size and use of the Church's holdings.
But they said the Church was facing serious financial problems and the constraints imposed by its ethical investment policy had cost it an estimated £70 million over the past six and a half years.
Some of the Church's financial advisers believe that the guidance they receive is over-scrupulous and that companies they avoided in the past have now cleaned up their act.
At the moment, the commissioners do not invest in arms or pornography, or any company whose main business is in gambling, alcohol, tobacco or newspapers.
Sources said that, while they were highly unlikely to drop their objections to the arms trade or tobacco, they might well relax their approach to newspapers and alcohol.
One source said the Church was never going to stop investing ethically but the commissioners would look at whether particular sectors of the market should be included.
"Things are always changing," he said. "There is now a binge drinking culture which we do not wish to encourage.
"But one might be able to distinguish, for example, between companies which make alcohol and those which sell it."
He said the commissioners might decide to invest in fewer rather than more companies following the review, which is being undertaken by the assets committee.
The commissioners have been embroiled in controversy in the past, most notably in the early 1990s when the Bishop of Oxford, the Rt Rev Richard Harries, took them to court over their ethical policy. The case was particularly embarrassing for the Church because Bishop Harries was a commissioner but their actions were largely exonerated by the courts.
With the Church's finances in a parlous state, dioceses are cutting clergy posts.
A Church spokesman said the commissioners had been highly successful in managing the holdings despite turbulent financial markets.