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Archbishop Desmond Tutu has accused the Anglican church of allowing its "obsession" with homosexuality to come before real action on world poverty.
"God is weeping" to see such a focus on sexuality and the Church is "quite rightly" seen by many as irrelevant on the issue of poverty, he said.
It may be good to "accept that we agree to differ" on the gay issue, he said.
Archbishop Tutu was in London to address a conference organised by the Christian charity Tearfund.
The Church says its work on poverty tends to be overlooked.
The Bishop of Ripon and Leeds, John Packer, said that apart from the government, the Church of England was the biggest provider of social services at home.
The Anglican Communion was also a major contributor to international projects such as Make Poverty History and the Millennium Development Goals, he said.
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Tutu: 'I am ashamed of homophobia' in the Church
More than 600 Anglicans marched through London in July to draw attention to the increasing danger that the goals - which include eradicating extreme poverty by 2015 - will not be met.
Prime Minister Gordon Brown told them that millions of people owed the Anglican Communion a debt of gratitude for upholding the cause of the poor.
Archbishop Tutu told the conference in London that the Anglican Church was ideally placed to tackle poverty because of its presence at the heart of communities in the UK and overseas.
However, and speaking outside the conference hall to the BBC, he said he sometimes felt ashamed of his fellow Anglicans as they focussed obsessively on trying to resolve their disagreement about homosexuality while 30,000 people died each day because of poverty.
"We really will not be able to win wars against so-called terror as long as there are conditions that make people desperate, and poverty, disease and ignorance are amongst the chief culprits," he said.
'Totally irrelevant'
"We seem to be engaging in this kind of, almost, past-time [while] there's poverty, hunger, disease, corruption," he told the BBC.
"I must imagine that God is weeping, and the world quite rightly should dismiss the Church in those cases as being totally irrelevant."
Archbishop Tutu accused some of his fellow Anglicans of going against the teaching of Jesus in their treatment of homosexual people by "persecuting the already persecuted".
The South African Nobel peace laureate said traditionalists were wrong to suggest that gay people had chosen homosexuality and the dispute had to be kept in proportion.
"It will be good for us obviously, to resolve our differences on this, and maybe accept that we agree to differ," he said.
For the Anglican Communion, that is more easily said than done.
Traditionalists suspect that the call for an end to discussions about homosexuality is designed to allow liberal developments to go unchallenged.
Others, including Bishop John Packer, insist that the Church must have a sexual ethic - a sense of what is right and wrong in sexual behaviour.
Most agree that only by staying united will it continue to exercise real influence on the world stage.
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