He said the Church of England was failing to capitalise on a widespread "residual faith" in English society.
"There is a great deal of residual faith around in this country, you only have to meet people in hospital, people who are sad from the death of those they love, people who don't turn up on Sundays to church but who ask us to pray with them," he said.
He added: "The trouble is that what is on the label of the Church tin is still not what is in the tin.
"On the label, the church tin says 'open here for salvation, peace, hope, purpose, love, Kingdom.. but when it is open inside the tin we so often find humbug, or if we are Anglicans, fudge.
"People outside the church have noticed that internalising tendency and they don't want to belong to an apparently useless and self-orientated organisation.
"The symptoms of this can be seen in the general decline of the self- preserving parts of the institutional church and in contrast, growth among the more visionary and less defensive."