A charitable building trust has been accused of deliberately allowing an 18th century Gothic mansion to fall into disrepair so it can build expensive new homes on a valuable site on the edge of Birmingham.

Residents are angry that registered charity Manor Building Preservation Trust has failed to honour a pledge to restore historic Great Barr Hall to its former glory.

The hall, in Great Barr Park, near Walsall, was badly damaged in an arson attack before the trust took it over. It has also been the target of vandals and been hit by several other fires.

But the charity vowed to redevelop the buildings, which date back to the 1700s, after purchasing the hall from receivers for less than £900,000.

The buildings are near to a Bovis development of executive homes on the site of the former St Margaret’s Hospital. Soon afterwards directors of the charity formed an associated company and transferred ownership of the land containing the hall to a private firm, while keeping parts of the grounds under the charity’s control.

The charity then allegedly received about £2.75 million from the National Grid to allow the power supply giant access to pylons contained on the site.

Manor Building Preservation Trust, which also heads sister firm Manor Building Preservation Projects, bought the Grade II*-listed hall in 2003 and revealed it had plans to safeguard its future, bringing the building and grounds back into use as a tourist attraction.

Grand proposals to rescue the derelict hall – famously used as a regular meeting place for the Lunar Society of inventors and scholars – were supported by Walsall Council and English Heritage, despite reservations from local campaigners that the development would be “unsympathetic to the site’s rich history”.

It is believed the trust investigated a proposal to join with a developer and apply for permission for an Enabling Development that allows green belt to be used for building in exchange for funds to cover the restoration of a listed property.

Initially restoration was to be funded by money raised from an enabling scheme on neighbouring Chapel Lane. An application to build 53 luxury homes was lodged by housebuilders Wimpey but this was subsequently withdrawn.

Another major housing developer later pulled out of a potential partnership and the site has remained derelict since.

A scheme to build two detached manor houses near a picturesque lake and convert the hall to the trust’s HQ was also suggested.

Campaigners have attempted to discover the intentions of the trust and the Birmingham Post has also tried to contact chairman Cyril Smith at its offices near Milton Keynes. But the telephone number stated on records posted with the Charity Commission does not exist, while several emails to the trust have been unanswered.