A number of charities are considering taking legal action against Birmingham City Council over its alleged mismanagement of the Highbury Trust, the charity that owns a Victorian mansion in the south of the city.
The council is the sole trustee of the trust, which owns Highbury Hall. Local community groups have accused the local authority of mismanaging the site, which they say has been used as an office for social services staff without paying rent for more than 20 years.
The Highbury Coalition, a group of local community groups and representatives, outlined its position in an open letter to the Charity Commission.
The letter said that an advisory group, set up in May by the council to give advice on a strategy for the trust, had proved a failure after the council did not listen to or act on its recommendations.
The coalition said it felt that the management by councillors created a conflict of interest and has asked for independent trustees to be put in place to govern the trust.
"We are aware that if Birmingham City Council and the Charity Commission fail to endeavour to resolve Highbury Trust's governance problems, it would be possible to bring charity proceedings against the council," the group wrote in the letter. "Such proceedings could see a recovery of losses incurred by Highbury Trust since 1932."
Birmingham City Council declined to comment.