Archbishop of Canterbury Dr Rowan Williams confessed that the Church of England had a "lot of explaining" to do after the General Synod rejected proposals for women bishops by six votes.
His successor in waiting Bishop of Durham Justin Welby will inherit the crisis created by a decision which Dr Williams acknowledged was "not intelligible to our wider society."
The current Archbishop said: "Whatever the motivation for voting, whatever the theological principle on which people acted and spoke, the fact remains that a great deal of this discussion is not intelligible to our wider society.
"Worse than that, it seems as if we are wilfully blind to some of the trends and priorities of that wider society.
"We have some explaining to do - we have as a result undoubtedly lost a measure of credibility in our society."
His successor in waiting Bishop Welby tweeted: "Very grim day, most of all for women priests and supporters."
The draft legislation was carried in the houses of bishops and clergy in the General Synod, but failed by six votes to gain the necessary two-thirds majority among lay members.
Around a third of Church of England clergy are women and they also make up just under a half of those training for ordination.
Campaigning group Women and the Church (Watch) said the result was a "devastating blow" to the Church of England but vowed to keep fighting for women bishops.
Watch chairwoman Reverend Rachel Weir said: "This is a tragic day for the Church of England after so many years of debate and after all our attempts at compromise."
Supporters of the failed legislation said they were "devastated" with many saying they felt they had been betrayed by lay members of the General Synod who voted against it.
However Archbishop of York Dr John Sentamu insisted that the CofE had "not committed suicide" and he was confident there would be women bishops in his lifetime.
Downing Street said that David Cameron shared the disappointment at the result, but stressed that it was a decision for the church rather than government or Parliament.
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