In 1959, at the suggestion of the Archbishop of Canterbury, Geoffrey Fisher, the British prime minister, Harold Macmillan, appointed Stockwood to the Diocese of Southwark. Under him, Southwark became one of the best known dioceses in the Church of England. Stockwood encouraged both the radical and conservative wings of the church. On the one hand he encouraged priests wearing jeans in public, marches against racism and the training of "worker priests" in the Southwark Ordination Course, yet he was also the first Church of England diocesan bishop to preach at the national pilgrimage to the shrine of Our Lady of Walsingham, of which he later became an honorary guardian. Stockwood however did not hesitate to send the police to close an Anglo-Catholic church in Carshalton and employed the term "perversion to Rome". Under his diocesan chancellor, Garth Moore, a number of trials of clergy followed, usually followed by a service of deposition from their holy orders in the cathedral. During the 1960s the term "South Bank religion" was connected with Stockwood's diocese and those in his circle espousing a more liberal theology. He was liberal in his view of the morality of homosexual relationships, favoured homosexual law reform and included homosexual couples among the guests at his dinner parties. On at least one occasion he blessed a homosexual relationship, but Stockwood himself said he was celibate. He somewhat incongruously, however, in his Sermons from Great St. Mary's , preached in Cambridge, did not hesitate to cast a slur on the characters of kings James I and Richard II whom he associated with this tendency. Stockwood was adept at making unusual and radical, but usually highly successful, appointments. John Robinson was appointed as his suffragan at Woolwich in 1959. Later Stockwood chose David Sheppard as Bishop of Woolwich in 1969, Hugh Montefiore as Bishop of Kingston in 1970, Michael Marshall to Woolwich in 1975 and Keith Sutton to Kingston in 1978. Stockwood appeared on the BBC chat show Friday Night, Saturday Morning on 9 November 1979, with Christian broadcaster Malcolm Muggeridge, arguing that the film Monty Python's Life of Brian was blasphemous. He told John Cleese and Michael Palin at the end of the discussion that they would "get thirty pieces of silver".
Later life and legacy
In 1980 he retired and went to live in Bath. In his autobiography, Chanctonbury Ring, Stockwood claimed to have had numerous paranormal experiences. A supporter of the Churches' Fellowship for Psychical and Spiritual Study, he said of the matter, "Our job is to examine the evidence without presupposition or jumping to conclusions. The weakness of the Church has been its refusal to consider the evidence and discuss it." Shortly before his death he was one of ten Church of England bishops "outed" by the radical gay organisation OutRage!. Michael De-la-Noy's biography, Mervyn Stockwood: A Lonely Life, paints him as a socialist who loved the trappings of wealth, privilege and royalty.