Visited 4.7.09, as part of a walk along the Malverns. The stone is pictured in "Stone Spotting In Herefordshire" (Jonathan Sant) and looked like a big old thing - it's tiny! If anyone was paying rent for it they were being conned...
In front of a blacksmith's shop here, occupying a vacant spot a little out of the upper road leading to Ledbury, near Colwall Green, is a mass of rough limestone rock, which bears the name of "Colwall Stone." I observed this name inscribed on an old map of Herefordshire; but have been unable to ascertain the purport of the stone, or its origin. I should feel inclined to consider it of the Druidical age, or at any rate a boundary or manorial "hoar stone;" but Mr. Allies states [... see other Folklore post].
The tradition I myself heard respecting the stone (which would carry us back to the times of Celtic heathenism) was, that it had been a place of worship (an idolatrous stone?) before the church was erected, and that the poor of the parish formerly received pay on this stone.
There is a large block of limestone called Colwall Stone, situated by a cottage (formerly named the "Old Game Cock"), on the road-side at Colwall Green. Some have supposed that it was placed there in ancient times as a memorial of some event, or as evidence of some custom; but, upon my visiting the spot in 1846, I learned from a person in the neighbourhood, that his late father, Francis Shuter, and others, about seventy years ago, got it out of the limestone quarry, in a copse at the foot of the Wytch, and, assisted by a strong team of oxen, dragged it to its present locality; but whether it was brought there in lieu of a more ancient memorial I could not learn. It is four feet long, three feet broad, and two feet six inches thick; and I was informed that the landlord receives one penny a year rent for it.
'The landlord receives one penny a year rent for it'?? Jabez, I think the locals were having you on. The rest of it is but a 'friend of a friend' story anyway and apart from suggesting a source for the stone isn't particularly enlightening? Besides, the village is called Colwall Stone - and how long has it been called that?
From 'On the Ancient British, Roman, and Saxon Antiquities and Folk-Lore of Worcestershire' by Jabez Allies, 1852. (online at Google Books).
The Colwall stone has several stories surrounding it. A giant is thought to have hurled it there from Clutter's cave after seeing his wife with another man, killing her. Another story says it was due to a boundary dispute between two giants, they agreed that one should throw the stone over the hills and where it landed should be the boundary between their lands. A third option was told to Alfred Watkins - the Devil was carrying the stone and his apron strings broke at this spot. It is also believed to turn around nine times when it hears midnight strike.
Palmer says that the stone was only set up in the late eighteenth century, but Smith claims that it is a replacement of an earlier monolith. Therefore we cannot rule out the possibility that a genuine Bronze Age standing stone once stood here or nearby.
Roy Palmer, The Folklore of Hereford & Worcester, Logaston, 1992
Brian S.Smith, A History of Malvern, Alan Sutton, 1978
Looks a bit sorry for itself. But if it's a replacement, why would you replace a stone with this? It also seems to be one of Alfred 'Ley' Watkins's 'mark stones', which might confer a dubious air, but then we do have the (presumably, but not necessarily older) folklore.