However, he was then cast as an Australian soldier in A Town Like Alice (1956), which became the third most popular film at the British box office in 1956 and won Finch a BAFTA for Best Actor. He followed it with The Battle of the River Plate (1956), playing Captain Hans Langsdorff. This was also successful financially and British exhibitors voted Finch the seventh most popular British star at the box office for 1956.
During this time, Finch continued to appear on stage in various productions while under contract to Olivier. Finch's closeness to the Olivier family led to an affair with Olivier's beautiful but increasingly unstable wife, Vivien Leigh, which began in 1948, and continued on and off for several years, ultimately falling apart due to her deteriorating mental condition.
In 1934–35 he appeared in a number of productions for Doris Fitton at the Savoy Theatre, some with a young Sumner Locke Elliott. He also worked as a sideshow spruiker at the Sydney Royal Easter Show, in vaudeville with Joe Cody and as a foil to American comedian Bert le Blanc. At age 19 Finch toured Australia with George Sorlie's travelling troupe.
George gained custody of Peter, who was taken from his biological mother and brought up by his adoptive paternal grandmother, Laura Finch (formerly Black) in Vaucresson, France. In 1925 Laura took Peter with her to Adyar, a theosophical community near Madras, India, for a number of months, and the young boy lived for a time in a Buddhist monastery. Undoubtedly, as a result of his childhood contact with Buddhism, Finch always claimed to be a Buddhist. He is reported to have said: "I think a man dying on a cross is a ghastly symbol for a religion. And I think a man sitting under a bo tree and becoming enlightened is a beautiful one."