Mr Owen is being evicted from the rectory

But Mr Owen said he had requested an extension and was effectively dismissed in 1999, with no right to take his case to an industrial tribunal.

Labour MEP Glyn Ford said: "What we are concerned about is the fact that, as a clergyman, he is denied the same employment rights as other workers.

"The fact is that Britain has not come into line with changes in society.

"The situation Mr Owen is in is based on a 1911 law stating that clergymen do not have a terrestrial employer. This is positively feudal.

Mr Owen, 64, said after the committee hearing: "I am very pleased with the outcome.

The Bishop of Stafford decided not to renew Mr Owen's job in 1999, on the basis of a recommendation from a review panel consisting of two junior clergy and a group of lay representatives from five churches.

Since then Mr Owen has received no stipend, and he lost a High Court appeal in 2000.

Lords' refusal

The appeal court ruling said Mr Owen had turned down a "package of proposals" to continue his ministry - a decision that was a "misjudgment" on his part, said Lord Justice Schiemann.

After that setback, Mr Owen's appeal to the House of Lords was refused, and he has now submitted an application to the European Court of Human Rights.

A spokesman for the bishop acknowledged on Friday that the clergy lacked some rights accorded most British workers, including access to an industrial tribunal, but said it was government and not Church law.

The spokesman said: "Mr Owen's fixed-term licence as rector was not renewed. He was offered alternatives and he refused them. He was not sacked."

The petitions committee will produce a report in the summer.

The matter will then go before the full European Parliament, which has no legal power but which could pressure the commission and government ministers to seek law changes in the UK.

Mr Owen returned home to prepare for another legal battle - to prevent the diocese evicting him from the rectory he refuses to leave.

"There is a lot to do, but the decision has been a boost and I look forward to seeing the report later this year."