Between the Monster and the Saint is the latest in a series of meditations on the nature of morality by the former bishop of Edinburgh - a man who, for many conservative Christians, has stretched the definition of liberal theology past breaking point, while remaining for many non-believers the most humane and persuasive apologist for faith. In this extended essay on the nature of good and evil and the evolution of the religious impulse, he offers a tangential contribution to what he calls "a very ugly debate" raging between fundamentalist religious thinkers and those he calls "neo-atheists" - clearly Dawkins, Grayling, Hitchens et al, though he politely declines to single them out by name, referring to them only as "some of the ablest thinkers of our time".

Holloway's new book is a valuable addition to that debate, based on a plea for more understanding and less dogmatic foot-stamping from both sides, but he walks a difficult tightrope between faith and reason and invites the criticism from his detractors on both sides of simply wanting to have his cake and eat it. He also lacks the controversial, strident tones of a Dawkins or a Hitchens, so one fears that his still, small voice of tolerance will fail to make the impact it deserves on public awareness of the debate.

Here he considers the place of human beings in the universe, the processes - in particular the response to death - that led us to create the myth of the immortal or transmigratory soul, and the evolution of religious thought to its present position, which he divides into four subsections: "strong" and "weak" religion, a third category he calls "after-religion", and the modern "neo-atheists", who preach that religion is the root of all evil. The terms are deliberate; Holloway is not the first to observe that "in their evangelical intensity they bear a marked resemblance to the religious protagonists they most despise". He also states that faith "gathers strength from what the world deems to be its absurdity, which is why the apostles of secularity are wasting their time trying to challenge its adherents on the grounds of reason". Here he has pinpointed the inherent flaw in all the many books produced in the past few years by writers in both camps: because each side has already made its mind up definitively, their arguments can only appeal to those who already agree with them, and are unlikely to persuade the opposition. Holloway's own book seems to be aimed principally at those entrenched atheists who view all religion as pernicious and primitive, and to be aimed at them in the hope of persuading them to appreciate some of the enduring values of faith.

It is the after-religion category that most clearly defines his own position, one he set out in his previous book, Looking in the Distance. "People in this position see religion as an entirely human construct, a work of the human imagination, but one that carries enduring meaning." Religious narratives are potent myths, he argues, because of what they reveal about human nature. He goes on to quote Richard Rorty's argument that the New Testament and the Communist Manifesto are flawed, but that both are valuable texts because they inspire us to believe that our future could be better. "It is possible to respect religion," Holloway concludes, "because, at its best, it challenges our brutish selfishness and our cultivated sadism, as well as offering us the hope of a better future for the world and its children."

Holloway is an accomplished literary stylist and the book is studded with references to Nietzsche, W H Auden, John Berger, Hannah Arendt, Michel Foucault and Robert Browning, to name but a few, as well as his own rather beautiful images: he speaks of being "more comfortable with the cloudy glimmerings of myth than the diamond-sharp clarities of religion or science". But at times he also speaks with a voice of colloquial frankness, reminding the reader that these reflections are the fruit of a personal journey rather than dry theological research. Nowhere is this clearer than in the introduction, where he relates a disturbing incident from his childhood when he joined a gang of men and boys in holding down a young woman at the shop where he worked so that another man could grope her. As an illustration of how the individual conscience can so easily be submerged into collective force, it seems particularly shocking coming from a former prelate, but it is these personal anecdotes and admissions of fallibility that make Holloway's writing so engaging and honest.

Whether or not you are persuaded by his perspective on matters of faith, it is hard to resist his conclusion about the human condition and our relations with one another; ultimately, this is an exhortation to pity, empathy and, at the last, gratitude. "It shows ingratitude and a lack of imagination to spend the life we've been given stamping, literally or metaphorically, on the lives of others, or sneering contemptuously at how they have chosen to make sense of theirs," he says in the final chapter. It is an almost identical conclusion to that of A C Grayling's recent essay Against All Gods, though reached by a different path: more important than the beliefs that divide us are kindness, and compassion for the common humanity that binds us together.