The decision was unanimous, according to the cathedral's statement published by the Guardian.
Cathedral officials were driven to reconsider their position on the protest camp by the resignation Monday of the Dean, Graeme Knowles.
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The Occupy movement has set alarm bells ringing all over the world, Bishop of London Richard Chartes said, and "St Paul's has now heard that call."
The cathedral wants to:
"engage directly and constructively with both the protesters and the moral and ethical issues they wish to address, without the threat of forcible eviction hanging over both the camp and the church."
St Paul's nonetheless respects the right of the City of London Corporation municipal authority to evict protestors on its land if it sees fit, the statement said.
The Corporation was due to serve eviction notices later Tuesday, Bloomberg reports. The letters will give protestors 48 hours to clear their camp.
Yet according to the BBC, demonstrators may try and evade eviction by simply moving from Corporation-owned land onto the grounds of St Paul's.
The cathedral has been criticised for its handling of the occupation, with some accusing it of being more concerned with St Paul's income as a tourist attraction than activists' right to protest.
In addition to Knowles, Canon Chancellor Giles Frasier also resigned over the issue.
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