London (CNN) -- London's landmark St. Paul's Cathedral will suspend its legal action against Occupy London protesters camped outside, it said Tuesday.
The decision has prompted the City of London Corporation, the body that runs London's financial district, to "press pause" overnight on its own plans to force the anti-capitalist protest camp to disband, it said Tuesday afternoon.
Corporation official Stuart Fraser said that the move would allow it to support the cathedral and give time for reflection.
"We're hoping to use a pause -- probably of days, not weeks -- to work out a measured solution," he said.
In its statement, St. Paul's said the decision to halt the legal action against the camp had been unanimous and followed meetings with the Bishop of London, Dr. Richard Chartres.
The resignation Monday of the Dean of St. Paul's, the Right Rev. Graeme Knowles, had given the cathedral leadership "the opportunity to reassess the situation," the cathedral said.
Cathedral leaders met with representatives of the protesters Tuesday morning "to demonstrate that St. Paul's intends 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."
The Right Rev. Michael Colclough, canon pastor of St. Paul's, told CNN the cathedral decided to suspend the legal action so it could engage with the protesters in "honest debate" and find ways to work together to highlight social injustice.
Protester Tanya Paton, who was at a meeting with church leaders Tuesday morning, told CNN she was delighted by the cathedral's decision.
It meant the two groups being "able to come together in a forum where we can work on the actual issues without being distracted by an eviction," she said, saying there was much expertise on both sides.
The activists had no intention of maintaining their tent camp forever, she added, but they did want to see real progress in bringing issues of social and economic injustice to the attention of decision-makers.
St. Paul's had come under fire after it said Friday, following discussions with the Corporation, that it would turn to the courts to try to remove around 200 tents from the square outside its main entrance.
Three clergy have resigned from the cathedral in the past week over its handling of the situation.
In Tuesday's statement, the bishop of London said: "The alarm bells are ringing all over the world. St. Paul's has now heard that call.
"Today's decision means that the doors are most emphatically open to engage with matters concerning not only those encamped around the Cathedral but millions of others in this country and around the globe."
The bishop has asked investment banker Ken Costa to "spearhead an initiative reconnecting the financial with the ethical," with the support of figures within London's financial world, the Church of England and the public sphere.
Canon Chancellor Giles Fraser, who resigned from St. Paul's last week amid concerns that plans to evict the protesters could lead to violence, will be among those involved, the statement said.
Announcing his own resignation four days later, Knowles said his position was "becoming untenable" following days of debate over the demonstrations.
The Occupy London protesters said their cause had never been directed at the cathedral staff, but was about "social justice, real democracy and challenging the unsustainable financial system that punishes the many and privileges the few."
The activists set up camp outside St. Paul's just over two weeks ago when their attempt to storm the nearby London Stock Exchange failed.
The cathedral, located in London's financial district, is one of the UK's top tourist attractions and staged the wedding of Princess Diana and Prince Charles in 1981.
CNN's Erin McLaughlin contributed to this report.