The Church of England's rejection of women bishops damaged its credibility, the Archbishop of Canterbury acknowledged in his final Christmas sermon.
While referencing the "deeply painful" vote by the Church's governing body, the Archbishop took heart from a groundswell of interest from the general public - contrasting this with a twelve percent drop in those identifying as Christians in the 2011 census.
"What was startling was how many people who certainly wouldn’t have said yes to the census question turned out to have a sort of investment in the Church, a desire to see the Church looking credible and a real sense of loss when – as they saw it – the church failed to sort its business out," he said.
The Archbishop of Canterbury delivered his first Christmas sermon
Williams is due to be replaced as leader of the Church of England by the Bishop of Durham, the Rt Rev Justin Welby, in March 2013.
The Archbishop also spoke of the "privilege" of meeting people who had worked to forgive cruelty and violence, including parents who had lost a child to gang violence.
Williams and Justin Welby were joined by the Archbishop of York, John Sentamu, in tweeting highlights from their Christmas sermons.
As confirmed nominee to succeed Williams as Archbishop, Welby also addressed the divisive vote on women bishops.
After referencing the PD James novel Children of Men, John Sentamu spoke of the timeless nature of greed and exploitation:
The top clergy were joined by an estimated 16,000 churchgoers tweeting on Christmas morning, many using the hashtag #ChristmasStartsWithChrist.