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David Burchell, who was appointed in 1999 after the dismissal of the previous director, confirmed he was dismissed from the position on Friday.
Yesterday he declined to comment on the reason for his dismissal or whether he was considering legal action.
However, he confirmed the dismissal would not affect his role as musical director of the City of Dunedin Choir, and he would remain in Dunedin for the "foreseeable future".
"I am not prepared to comment further," he said.
The Dean of Dunedin, the Very Rev Dr Trevor James, said the incident was not comparable to the "Raymond White affair", referring to the former musical director who was dismissed in 1998.
Dr James declined to comment further about the Burchell dismissal, but released a prepared statement from the Bishop of Dunedin, the Right Rev Dr Kelvin Wright, who is in Canada.
The statement confirms the departure of Mr Burchell, following an "ongoing disagreement involving the director of music which the chapter, the dean and myself have tried, with the utmost care and patience, to resolve".
"After the expenditure of considerable time, energy and money it appeared, at the end of 2010, that a satisfactory outcome had been reached," Dr Wright said.
"Disappointingly, this has not proven practicable, and it is the considered and prayerful opinion of the dean and myself that in the best interests of the future development of the Cathedral, Mr Burchell's enormous musical skills would be most usefully applied elsewhere."
The Otago Daily Times understands a failed attempt late last year by senior church officials for Mr Burchell to resolve his differences with former choir members played a role in his termination last week.
Those differences are believed to centre on the "bullying" of members - which, following the expulsion of a family two years ago, has led to choir numbers halving, one former choir member alleged.
Mr Burchell, a graduate of Oxford University, was appointed Dunedin City Council organist in May last year.