In the letter, circulated to his parish, the Rev Paul Morgans, 30, of St Peter's Church in Pentre, Rhondda, complained of "physical and verbal" abuse, and alleged that he had been "the victim of much plotting and subversion to remove [him] from office".
"The... experience has been singularly unpleasant, emotionally and spiritually exhausting, expensive and destructive," he wrote. He felt "totally burnt out" by the "infantile politics from certain circles", and the "back-biting and infighting".
Mr Morgans, who took over as vicar of St Peter's in 1995, said that when he arrived at the parish he found people "exclusive and judging, unready to listen to change, trivial and insensitive".
Doreen Neely, 78, who has been going to St Peter's all her life, said: "It's been very sad. It reflects badly on the church. Mr Morgans has stepped on everyone's toes. He preached forgiveness, but didn't seem to practise it."
She said that the congregation had dwindled over the past four years, but that they would start to return now. "We are hoping we can all now get back together. We are a very warm congregation really," she said.
In his letter Mr Morgans added: "I sincerely hope this letter clearly sets out the reasons for seeking pastures new and, therefore, preventing the usual fabrication and false accusation." He plans to become honorary assistant priest of St German's Church in Roath, Cardiff.
The Rev David Williams, a spokesman for the Church in Wales, said the latest episode was just one of a series of "sad situations", including a fracas between Mr Morgans and several neighbours. "We have got to rebuild confidence in the parish and the sense of being concerned. It's going to be a hard job," he said.Reuse content