One potential answer: It may have been popularized at Oxford.
On [Christmas Eve] our ancestors were wont to light up Candles of an uncommon size, called Christmas Candles*[...]
*In the Butter of St John's College, Oxford, an ancient candle-socket of one still remains, ornamented with the figure of the Holy Lamb. It was formerly used to burn the Christmas Candle in, on the high-table, at supper, during the twelve nights of that festival.
--Observations on Popular Antiquities: Chiefly Illustrating the Origin of Our Vulgar Customs, Ceremonies, and Superstitions, 1877
But yes, it could be of pagan origin as well.
On the eve of the winter solstice, the Anglo-Saxons burnt a large block of wood, as an emblem of returning light and heat, from whence may be traced the custom of burning a yule-clog on the eve of Christmas. On the introduction of candles, numerous large candles were lighted, to afford light to the in-door festivity, together with the log. Hence the Christmas Candle, and the denomination of the Feast of Lights sometimes given to the Christmas festival.
--History of the Christmas Festival, the New Year, and their peculiar customs, 1843