A three member review panel found the Newcastle Anglican professional standards board decision in February was excessive, and the bishop had been denied procedural fairness.

The review panel found the board had reached its decision by relying on information from the Royal Commission into Institutional Responses to Child Sexual Abuse Newcastle Anglican case study, without allowing Bishop Appleby the opportunity to respond.

The Professional standards board in February ruled Bishop Appleby should be deposed as a bishop and hold no further office, after considering evidence about the bishop's responses to a report by Newcastle man Steve Smith in 1984 that he had been sexually abused by Newcastle Anglican priest George Parker.

The evidence included the royal commission being satisfied that Mr Smith met Bishop Appleby in 1984 and disclosed that he had been sexually abused by Father Parker over several years as a child. It found Bishop Appleby took no further action so that Parker remained licensed as a priest in Newcastle diocese until 1996.

Bishop Appleby argued he was not the cause of Parker remaining in the diocese, because his superior, the late Newcastle Anglican Bishop Alfred Holland, had the power to take action against Parker.

The review board accepted Bishop Appleby's submission that he was denied procedural fairness because the professional standards board included consideration of his responses to allegations about another Anglican priest, which had not formed part of the complaint against him.

Systemic issues relating to the diocese's handling of child sexual abuse allegations, which formed part of the professional standards board decision, were not elements of the specific complaints against Bishop Appleby, the review board found. He was denied procedural fairness in not being able to respond to them, the review board said.

But it rejected Bishop Appleby's submission that he was fit to be employed by any church body without any conditions.

The review board's decision outraged Mr Smith who said Bishop Appleby "could have changed my life" in 1984 if he had acted on his allegations about Parker.

"Appleby is arguing it wasn't his responsibility because he wasn't the bishop, but he was a bishop. The royal commission found he took no action," Mr Smith said.

"I'm absolutely outraged. After all the processes we've been through, we get this."

In a statement Newcastle Anglican Bishop Peter Stuart confirmed the review board's decision and its finding that Bishop Appleby should have conditions placed on the exercise of any future ministry.

"The Royal Commission found that Bishop Appleby failed to investigate allegations against George Parker. This finding was supported by the diocesan professional standards board," Bishop Stuart said. "The diocesan professional standards review board has determined that the interests of the church and the community are served by Bishop Appleby being subject to restrictions in the exercise of any ministry.

"George Parker inflicted great harm and was subject to multiple charges prior to his death. His survivors have shown great courage in speaking of their experience. They are remarkable men."

The review board returned the matter to the diocesan professional standards board which had the responsibility to recommend the conditions that should be placed on Bishop Appleby, Bishop Stuart said.

"I hope to receive those recommendations soon," he said.

Bishop Appleby's permission to undertake ministry was suspended in January 2017 when counsel assisting the Royal Commission recommended findings against Bishop Appleby.

Bishop Appleby remains unable to undertake any ministry. He was Newcastle assistant bishop from 1983 until 1992. During his evidence to the royal commission Bishop Appleby accepted on the basis of a diary entry that he had met with Mr Smith in 1984, but denied that Mr Smith raised that he had been sexually abused by George Parker as a child.