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The Archbishop of York announced the decisions this afternoon, following waves of protests at proposals to shut the historic library.

Dr David Hope also announced that though visitors would in future have to pay a £4.50 entrance fee, local residents would be able to apply for a free entry pass.

He said the library would remain open and available for all, as it currently is.

He said: "The Chapter recognises that it has made an error of judgement. It got it wrong."

The only change is that the lending-borrowing facility will be withdrawn.

An advisory group had also been set up to look at issues relating to the library and Minster as a whole.

Dr Hope also responded to criticism of former Dean Raymond Furnell's management style, and to claims by a former canon that there was misguided extravagance at the Minster and overgenerous perks for staff.

The Archbishop said the Minster was in good hands today. "I refute any suggestion whatsoever of financial mismanagement, or any question of the misappropriation of funds.

"I can assure members of the public that such contributions and donations made to the Minster, and in particular to any specific work or object, are scrupulously applied to the end to which such donations are made."

He said the audited accounts were published annually and available for public scrutiny.

He said that since 2000, all expenditure had had to be agreed by a finance committee, chaired not by the Dean but by a lay canon.

Former staff have criticised the way they were treated by Mr Furnell, who retired recently. Dr Hope said: "Ray had a particular and distinctive style of ministry which different people responded to in differing ways."

Dr Hope said he would urge caution over highlighting individual items of expenditure, without stressing the overall context of rising costs, huge fabric and preservation demands, and the generally excellent state of the church fabric left by the Dean.

The Archbishop said the Dean and Chapter had "very reluctantly" decided to bring in admission charges for the Minster on August 2, with the promise that the decision would be reversed in future if there was an upturn in investment income.

He was disappointed about the decision but was aware of the context, and was pleased all services would remain free of charge. Christopher Norton, a leading library campaigner, said: "I'm very encouraged that the Chapter has recognised it made an error of judgement."

But he questioned the axing of the borrowing-lending system.

York MP Hugh Bayley said the decision to retain the Minster library was a "wise and constructive response".

Under the charging scheme, under-16s will go free, with a £3 concessionary rate. Toilets will be provided as part of improved facilities.

Updated: 14:14 Monday, June 23, 2003