The archbishop of Canterbury, Justin Welby, and the Catholic archbishop of Westminster, Cardinal Vincent Nichols, have expressed their deep concern to the Israeli government over threats to church lands which caused the closure of the Church of the Holy Sepulchre.

In a joint letter to the Israeli ambassador to London, Mark Regev, the two faith leaders laid out their opposition to the 'unprecedented, punitive and discriminatory taxation of Christian institutions' and their fears that the dispute could inflict long term damage on relations between the Christian and Israeli communities.

The Jerusalem mayor caused outrage among church leaders across denominations in recent weeks by his attempt to make any church properties that are not places of worship retrospectively subject to municipal taxes. The municipality claimed that the three Christian denominations collectively owe some 186 million shekels ($53 million) in back taxes.

In response, the Greek Orthodox, Catholic and Armenian leaders of the Church of the Holy Sepulchre agreed sensationally to close the Jerusalem church in protest last Sunday.

The closure of the iconic church also coincided with a meeting by a ministerial committee for legislation, which had been scheduled to discuss a bill, supported by Israeli settlers, allowing the state to expropriate land in Jerusalem that the Greek Orthodox and Catholic churches have sold off since 2010 to private investors.

After the intervention of the embattled Israeli prime minister Benjamin Netanyahu and an apparent climbdown on both fronts, the church re-opened last Wednesday morning. Netanyahu and the Jerusalem mayor Nir Barkat established a team headed by the regional cooperation minister Tzachi Hanegbi to try to formulate a solution concerning the issue of tax collection from the churches, according to a statement by the prime minister's office last Tuesday.

However, the archbishops clearly do not believe the threats are over and their letter stated that both the taxes and the bill 'threaten to cause serious damage to the Christian presence in Jerusalem, to Christian families, and to the Christian institutions, including hospitals and schools, which serve many of the poorest people, regardless of their background'.

It went on: 'It is our view that the measures being pressed in Jerusalem and in the Knesset are a clear and evident threat to the status quo. These violations of historic agreements risk undermining prospects for peaceful coexistence between communities, at a time of already heightened tensions.'

The two archbishops said that they are praying for the peace of Jerusalem and have urged the Israeli government to address this crisis as a matter of urgency and immediately enter dialogue with the local churches to find a resolution.

Welby met with Netanyahu in Jerusalem last year, when the Israeli prime minister reminded the archbishop that they had first met at the funeral of Margaret Thatcher in 2013. Netanyahu is currently in the US.