Birmingham City Council has been accused of misusing the resources of charities under its control.
The council is the sole trustee of 13 charities, including Highbury, a trust that owns a 31-acre estate left in 1932 to the people of Birmingham by Joseph Chamberlain, a local politician and Cabinet minister before the First World War.
But the council is using the main building on the estate as a conference and banqueting centre, and another building as offices for social services staff.
Tony Thapar, coordinator of the Moseley Community Development Trust, part of a consortium of development organisations opposed to the council's use of the site, said the council had used the buildings for non-charitable purposes without paying rent to Highbury for more than two decades.
The council was now proposing to change the deeds of the estate to allow it to sell the buildings, a move that has provoked outrage among local people, he said.
"The reason they want to sell off the estate is that their negligence has led to £700,000 needing to be spent on the repair and upkeep of the buildings," he said.
"There is a clear conflict of interest in the council running this property. It's effectively acting as landlord and tenant for these buildings."
He said the same problem applied to several other buildings and pieces of land held in charitable trusts for the good of the city.
The Charity Commission lists the council as the sole trustee for 13 charitable trusts, but accounts have not been filed with the regulator for any of them for more than two years. Ten of them have no recorded financial activity for at least six years.
A spokeswoman for the commission said the regulator had asked the council to explain the overdue accounts. "We are working with the trustees to find an appropriate way forward in order to improve the transparency and accountability of the charities," she said.
Birmingham City Council declined to comment.