Two residents of Dartford in Kent have appealed to the Charity Tribunal against a decision by the Charity Commission that could lead to a Tesco superstore being built on part of the town's Central Park.
The unregistered charity known as 'Kidd Legacy being a part of Central Park Dartford', whose sole trustee is Dartford Borough Council, sold a small section of the charitable land it administers to property developer St James' Investments in 2005.
The commission ruled that the council had breached charity law, but accepted that it had acted in good faith and approved its proposal to replace the sold land with other land of lower value and provide £270,000 - the difference in value - towards the maintenance and improvement of the charity land.
The terms of Charles Newman Kidd's 1903 legacy were that the land should be used "in perpetuity as a public recreation ground and for no other purpose whatsoever".
But a final decision made in March by David Locke, director of charity services at the commission, concluded that the new arrangement would be in the charity's best interests.
The local residents have taken advantage of a rule that allows "any other person affected" by a commission decision to appeal to the tribunal. One of the appellants, Lennox Ryan, said: "It was a stroke of luck that the Charity Tribunal was set up last year because we could not have afforded to appeal to the High Court."
He said the replacement land was already part of the park and that the original intention of Kidd's legacy was that the council would pay for the land's upkeep out of its own funds. The developer, Ryan said, should be obliged by a compulsory purchase order to sell the land back to the charity or to maintain it as parkland in the development.
He also objected to the tall blocks of flats that would overlook the park as part of the development.
A spokeswoman for the commission said: "We are currently considering our formal response, which we are required to provide within one month."