Not only is it significant because of its historical context, but it's also one of the few small churches that is surrounded by an active cemetery where 28 residents are interred and a columbarium of ashes and plaques.

They're not all buried around the exterior of the church either.

Inside the church lay the remains of Louisa Katie Cargill from Coombing Park who was buried there in 1954, aged 79.

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Known by her descendants simply as Katie Cargill, in many ways Mrs Cargill represents the personification of the Carcoar community and their relationship with Australian history.

Born in 1875 Mrs Cargill was a close friend of Australia's first Prime Minister Edmund Barton and attended the opening of parliament in Melbourne in 1901.

She also travelled as a guest with Edmund and Lady Barton in 1902 to England for the coronation of Edward 7th.

Family members describe her as extremely down to earth, very kind and very strong minded.

Mrs Cargill died of a heart attack in Victoria, her will expressly said she was to be buried inside St Paul's at Carcoar.

She lived at Coombing Park for 70 years and never missed a service in St Paul's when she was home.

Church warden Ron Murray said that the law states that burial sites must remain open to the public.

"Having the remains inside the Church will surely limit the prospective buyers," he said.

"Not to mention an antagonistic community who are passionate about maintaining the fabric of one of the most unique and historically significant villages in Australia."

The administrator of the Anglican Diocese of Bathurst Archdeacon Brett Watterson said that having a body interred within a church as small as St Paul's was very rare.

"We are still investigating that as we simply don't know the answer just yet," he said.

Archdeacon Watterson said that some other churches within the diocese are surrounded by cemeteries and that it did complicate the issue.

"There are other churches that have cemeteries and when they're sold part of the provisions when they purchase a property is that people can still visit a cemetery," he said.

"We acknowledge the pain it's bringing to these communities when they lose a place of worship, but we have the pain of people who have been abused by members of the church that we have to somehow compensate."