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The Archbishop of York Stephen Cottrell is facing calls to resign over his handling of sexual assault allegations just days before he is set to take temporary charge of the Church of England.

A BBC investigation claims that whilst Cottrell was Bishop of Chelmsford, he allowed priest David Tudor to remain in post despite knowing he had been barred by the Church from being alone with children and that he had paid compensation to a victim.

A spokesperson for Mr Cottrell claimed that he did not have the legal authority to sack Tudor who was only banned from the Ministry two months ago after admitting to two historic sex allegations.

Helen-Ann Hartley, Bishop of Newcastle, said it was “impossible” for Mr Cottrell to remain Archbishop of York or for him to lead the Church of England.

Mr Cottrell is due to take on many of the soon-to-step-down Archbishop of Canterbury’s official functions temporarily from January 6, when Justin Welby quits over failures in the handling of a separate sex abuse case in the Church.

Dr Helen-Ann Hartley told BBC Radio 4’s Today programme: “We’ve got a situation where one archbishop has resigned over a safeguarding failure and we now have the remaining archbishop who has a very serious matter that calls into question his ability to lead on the urgent change that is required in safeguarding, both operationally and culturally, in the Church of England.

“So I think my personal view is that the evidence before us makes it impossible for Stephen Cottrell to be that person in which we have confidence and trust to drive the change that is needed.”

She said it is also impossible for him to remain as Archbishop of York because “he will also be, for a period of time at least, responsible for being the figurehead of the whole Church of England and I think you can’t do that role with any credibility or moral authority”.

A woman who was paid £10,000 compensation by Tudor over claims that he sexually assaulted her as a child says that Cottrell’s failure to act result in his resignation.

Tudor worked for the Church of England for over 46 years, in London, Surrey and Essex, rising from curate to honorary canon.

In 1988, Tudor was convicted of indecently assaulting three girls and was jailed for six months but had his conviction quashed after it was found that the judge had misdirected the jury.

In 1989, Tudor was banned for sexual misconduct by a Church tribunal but was allowed to return to ministry after 5 years.

In 2008, he had been working under a safeguarding agreement preventing him from being alone with children or entering schools in Essex.

Mr Cottrell’s office say during his spell as the Bishop of Chelmsford, he had been unable to act because there were no complaints that had not already been dealt with.

The latest revelation comes at a difficult time for the Church of England, who have come in for strong condemnation over their failure to properly investigate and handle historic sex allegations.

Last month, the Archbishop of Canterbury was forced to resign after a damming report concluded that he and others failed to act on concerns they had about prolific child abuser John Smyth.

Justin Welby announced he would resign, after initially declining to do so, in the wake of the Makin report, which concluded Smyth – the most prolific serial abuser to be associated with the Church – might have been brought to justice had Mr Welby formally reported him to police in 2013.

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