Act 7, of the Seventh Ecumenical Council:
“We define the rule with all accuracy and diligence, in a manner not unlike that befitting the shape of the precious and vivifying Cross, that the venerable and holy icons, painted or mosaic, or made of any other suitable material, be placed in the holy churches of God upon sacred vessels and vestments, walls and panels, houses and streets, both of our Lord and God and Savior Jesus Christ, and of our spotless Lady the holy Mother of God, and also of the precious Angels, and of all Saints. For the more frequently and oftener they are continually seen in pictorial representation, the more those beholding are reminded and led to visualize anew the memory of the originals which they represent and for whom moreover they also beget a yearning in the soul of the persons beholding the icons. Accordingly, such persons are prompted not only to kiss these and to pay them honorary adoration, what is more important, they are imbued with the true faith which is reflected in our worship which is due to God alone and which befits only the divine nature. But this worship must be paid in the way suggested by the form of the precious and vivifying Cross, and the holy Gospels, and the rest of sacred institutions, and the offering of wafts of incense, and the display of beams of light, to be done for the purpose of honoring them, just as it used to be the custom to do among the ancients by way of manifesting piety. For any honor paid to the icon (or picture) redounds upon the original, and whoever bows down in adoration before the icon, is at the same time bowing down in adoration to the substance (or hypostasis) of the one therein painted. For thus the doctrine of our Holy Fathers, it was the tradition of the universal Church."
Interpretation (from The Rudder):
An idol is one thing, a statue is another thing, and an icon (or picture) is a different thing. For an idol differs from an icon in that the icon is a likeness of a true thing and its original, whereas the idol is an image of a false and inexistent thing, and is not the likeness of an original, according to Origen and Theodoret — just as were the idols of the false and inexistent gods of the Greeks. We call those images which embody the whole figure statues and carved or sculptured figures in general. As for this kind of images, namely, the statues, the catholic (Orthodox) Church not only does not adore them, but she does not even manufacture them, for many reasons:
1) because in its present definition this Council says for images to be produced with paints (or colors), with mosaic, or tessellated work, and with any other suitable material (which means with gold and silver and other metals, as Theodosius the bishop of Amorion says in Act 4 of the same Council) upon the sacred utensils, and robes, including sheets and cloths; upon walls and boards, and houses and streets. It did not mention a word about construction of a statue. Rather it may be said that this definition of this Council is antagonistic to statues;
2) because neither the letters written by patriarchs in their correspondence with one another, and to emperors, nor the letters of Pope Gregory to Germanus and of Pope Adrian to the present Council, nor the speeches and orations which the bishops and monks made in connection with all the eight Acts of the present Council said anything at all about statues or sculptured figures. But also the councils held by the iconomachs, and especially that held in Blachernae in the reign of Copronymus, in writing against the holy icons, mention oil paintings and portraits, but never statues or sculptured figures, which, if they existed, could not have been passed over in silence by the iconomachs, but, on the contrary, they would have been written against with a view to imputing greater blame to the Orthodox;
3) because although the woman with an issue of blood made a bronze statue of Christ in memory of and by way of giving thanks for the miracle and the benefaction which it had conferred upon her; and she set it up in the Panead, at the feet of which there sprang up a plant, or herb, which cured various ailments; and, as some say, that statue was smashed to pieces by the Emperor Maximinus, before Constantine the Great, and the bronze was seized by him; or else Julian the Apostate seized it, and put in its place the statue of Jupiter, as an anonymous writer says. Though, I say, the woman who had an issue of blood did make this statue (which the Christians took into the Church and honored; and people went to see it out of a yearning for the original of it, as Philostorgus the Arian historically records), yet, as a matter of fact, that work of the woman who had an issue of blood was a concession from God, who, for goodness’ sake accepted it, making allowances for the imperfect knowledge of the woman who set it up; and because that was an embodiment and mark not of the grace of the Gospel, but of the old Law, as Pope Gregory II says in writing to St. Germanus (for the old Law had the two Cherubim, which were gold statues and sculptured figures containing all the body of the angelic powers, according to ch. 38 of Exodus, which Cherubim, according to an unknown expositor, had the face of a calf, and adored the Ark of the Covenant (here called the Ark of the Testimony, and by this adoration separated the Israelites from the idolatry of the Egyptians, who used to adore the calf. For the Jews learned from this that if a calf adored the Ark, it followed that the Egyptians were wrong in adoring it as a god).
Not only the old Law, but also the custom of the Greeks fostered the erection of statues and sculptured figures, as St. Germanus writes in a letter to Thomas of Claudiopolis which is to be found in Act 4 of the present Council, and which says: “It being obvious that the Savior leveled His own grace to condescension with the faith of the woman, and showed what has been made evident to us above, namely, that it is not that what is performed is in general the object, but that it is the aim of the one performing it that is being reduced to experience . . . ." And again: “We do not say this, so that we may find an excuse for exercising the art of making bronze pillars, but merely in order to make it plain that the Lord did not discard the national custom at this point, but, instead, availed Himself of it to exhibit therein for a considerable length of time the wonder-working and miracle-working efficiency of His own benevolence; on which account it is not devout to disparage the custom of a somewhat more pious nature which has prevailed among us.”
You see here three things as plainly as day, to wit: 1) that the erection of the statue of Christ was moral, and that the Lord accepted it as a matter of compromise with the times; 2) that statues ought not to be manufactured; and 3) that it is more pious and more decent for the venerable images to be depicted, not by means of statues, but by means of colors in paintings. For the same saint said above by way of anticipation that in historically recording the facts concerning the statues, he historically recounts the fact that the icons of the Apostles Peter and Paul, painted in colors, were still extant . . . Canon LXXXII of the 6th, moreover, says that we ought to prefer the grace of the Gospel to the legal form, and ought to set up the human character, or figure, of Christ in icons instead of the olden lamb even in oil paintings.
So that from all that has been said it is proved that the Westerners are acting contrary to the definition of this holy and Ecumenical Seventh Council, and contrary to the tradition of the Church in making statues and sculptured figures and plaster of paris replicas, and setting them up in their churches. We said hereinabove those representations which embody the whole of that which they represent are called statues and sculptured work and plaster of paris figures in general, whereas those representations which do not embody the whole of the person or other object which they are intended to represent, but at most merely exhibit them in relief, projecting, that is to say, here and there above the level and surface of the background, are not called statues or sculptured work or plaster of paris figures or any such name, but, instead, they are called holy icons (or, if they are not holy, simply pictures). Such are those which are to be found engraved or stamped or otherwise delineated upon the sacred vessels, on divine Gospels, and other holy books, on precious crosses, of silver and gold, according to Dositheus (p. 656 of the Dodecabiblus); to the same class are assigned also images cast in wax and more or less in relief, that is to say, projecting at various points above and receding at other points below the plane surface of the image, concerning which divine Chrysostom (in his Discourse wherein he argues that one and the same Lawgiver is the author of both the Old and the New Testament; and in Discourse 307 on the vesture of priests, the origin of which is to be found in the Gospel of the kingdom of Christ) says the following:
“I myself have loved the images cast in wax as a matter of piety. For I beheld an angel in an image driving back hordes of barbarians. I saw barbarian troops being trodden underfoot, and the words of David coming true, wherein he says: ‘Lord, in thy city Thou wilt do their image havoc’ (p. 852 of the second volume of the Conciliar Records, in Act 6 of the 7th C.; and p. 647 of the sixth vol. of Chrysostom). Oecumenius, too, accepts and approves this kind of image which is cast in wax in the manner above described (in his commentary on the Epistle to the Hebrews). Hence, in writing to Symeon the bishop of Bostra, Anastasius the Patriarch of Antioch says: “though, as a matter of fact, an image is nothing else than a piece of wood and colors mixed and mingled with wax” (p. 845 of the second volume of the Conciliar Records). In the same class with these images are placed also the images which are carved in wooden crosses (crucifixes) and medallions. They, too, likewise are wrought in relief and project above the plane of the level surface, and do not compromise the whole body of the person or thing represented.
The reason and cause why statues are not adored or venerated (aside from the legal observation and custom noted hereinabove) seem to me to be the fact that when they are handled and it is noticed that the whole body and all the members of the person or thing represented are contained in them and that they not only reveal the whole surface of it in three dimensions, but can even be felt in space, instead of merely appearing as such to the eye alone, they no longer appear to be, nor have they any longer any right to be called, icons or pictures, but, on the contrary, they are sheer replications of the originals. Some persons, though, assert or opine that the reason why the Church rejected or did away with statues was in order to avoid entirely any likeness to idols. For the idols were statues of massive sculpture, capable of being felt on all sides with the hand and fingers.
It is clear from the above that, while bas-relief and embossed images are permissible for veneration, fully 3-dimensional statues are not.
And, from Leonid Ouspensky's book Theology of the Icon:
The decisions of the Quinisext Council were signed by the emperor, and a place was left for the signature of the Pope of Rome; following were the signatures of the Patriarchs Paul of Constantinople, Peter of Alexandria, Anastasius of Jerusalem and George of Antioch. These were followed by the signatures of 213 bishops or their representatives. Among the signatures was that of Basil, archbishop of Gortyna (in Crete), who signed on behalf of the Church of Rome. There were also signatures of other bishops of the West. The authority of these representatives of Western Christianity is contested. Hefele writes: "It is true that the Vita Sergii in the Liber Pontificalis reports that the legates of Pope Sergius, having been deceived by the emperor, signed their names. But these legates of the pope were simply pontifical apocrisiaries living in Constantinople and not legates who had been sent expressly to take part in the council." In any case, as soon as the council had ended, the acts were sent to Rome requesting Pope Sergius' signature. He refused, even rejecting his copy of the acts. He declared that the decisions of the council had no value and asserted that he preferred death to accepting error. The error consisted undoubtedly in some teachings and practices which were condemned by the council, such as, for example, the obligatory celibacy of clergy, the Saturday fast (already forbidden by the First Ecumenical Council), the representation of Christ in the form of a lamb, and others. Yet the Roman Church eventually accepted the Seventh Ecumenical Council, which refers to Canon 82 of the Quinisext Council. Therefore, it can be said that the Roman Church implicitly also recognises this canon. Pope St. Gregory II refers to Canon 82 in his letter to the Patriarch of Constantinople, St. Germanus. Pope Hadrian I, for example, solemnly declares in his letter to Patriarch St. Tarasius his adherence to the Quinisext Council; he does the same in a letter to the Frankish bishops in defence of the Seventh Ecumenical Council. Pope John VIII spoke of the decisions of the Quinisext Council without voicing any objection. Later, Pope Innocent III, quoting Canon 82, calls the Quinisext Council the Sixth Ecumenical Council. But all this is only the agreement of some popes, whereas there were others who had contrary opinions. On the whole, the West did not receive the decisions of the Quinisext Council.
The teaching of the Church on the christological basis of the icon, therefore, remained foreign to Western Christianity. This teaching could not enrich the sacred art of the West, which even today retains certain purely symbolic representations such as the lamb. The refusal to accept the decisions of the Quinisext Council later had, in the realm of sacred art, a great importance. The Roman Church excluded itself from the process of a development of an artistic and spiritual language, a process in which all the rest of the Church took an active part, with the Church of Constantinople providentially becoming the leader. The West remained outside of this development.
The Orthodox Church, on the contrary, in accordance with the Quinisext Council, continued to refine its art in form and in contents, an art which conveys, through images and material forms, the revelation of the divine world, giving us a key to approach, contemplate and understand it. It seems to us that it is particularly important for Western Orthodoxy, as it emerges in our own time, to be well aware of the significance of Canon 82 of the Quinisext Council. The canon, in fact, is the theoretical basis of liturgical art. Whatever course Western Orthodox art will take in the future, it will not be able to bypass the basic directive which was formulated for the first time in this canon: the transmission of historical reality and the revealed divine truth, expressed in certain forms which correspond to the spiritual experience of the Church.
The above excerpt well explains why there is such divergence in content and form of western religious art and that of canonical Orthodox iconography. Despite the church of Rome accepting the rulings of the Seventh Ecumenical Council (convened almost a century later), it seems little mind was paid by that church to the prohibitions of that Council to the portrayal of God the Father as a bearded old man, or Christ as a lamb, or in other forms inconsistent with His Incarnation, hence the perpetuation of such images to this day. A conclusion could therefore be drawn, that the west also similarly saw no problem with statues as ecclesiastical art.