Manx National Heritage has denied it is pocketing funds from a large bequest donated for community use.

The £1m fund is a bequest left by Colby resident Donny Collister, who died in 2007 at the age of 93.

He left his property in Colby for the benefit of the people of Colby and to be preserved as part of the heritage of the island, including a field in Colby for the erection of a heritage hall and museum there.

Mr Collister (pictured), who served with the Manx Regiment during the Second World War, wanted his personal property of historical significance, with particular regard to Manx heritage, to be displayed there.

Arbory Parish Commissioners suggested that Mr Collister’s two main wishes, the heritage centre/museum and the benefit of the people of Colby, could be best met by a public amenity with a heritage centre/museum annexe.

However, in January 2012 the High Court concluded that many of the clauses within the will could not be achieved. So the residual estate was left to MNH.

MNH has given more than £140,000 to community projects such as a tent for Laa Columb Killey and to Arbory Church for the Captain Quilliam window, but after appealing for a further - and final - round of grant applications up to £5,000, many residents asked where the money has gone.

The authority said: ’The commissioners were deeply concerned that having largely ignored Mr Collister’s wishes as to how his estate should be used, MNH is now choosing to pocket the majority of the value of the estate for internal use and is failing to live up to its initial promise to provide at least some community access to the funds.’

The authority asked to meet MNH trustees ’so that they can better understand why MNH has taken this rather selfish decision and hopefully persuade MNH to reconsider its decision’.

MNH director Edmund Southworth replied: ’It is inappropriate to describe the bequest as "underspent". The Collister bequest was not "restricted" to particular purposes and has never been separated out in the trustees’ accounts. In the period since the bequest was received MNH has spent significant sums on its charitable purposes including a substantial amount from reserves.

’It is however the case that a significant part of the value of the Collister bequest is still held in a property. Trustee policy has to strike a balance between current expenditure and providing for the long-term preservation of the island’s heritage. Some monies are always held in reserve for future projects or as a contingency for unknowns.

’MNH has not ignored Mr Collister’s wishes. The court agreed that the original narrow intention of the will could not be delivered.

’A selection of his photographs and other memorabilia has been acquired for the next national collections. We involved his family in this process.

’MNH is not "choosing to pocket the majority of the value of the funds for internal use", MNH is a Manx-registered charity and all its expenditure is in line with its charitable objectives and benefits the people of the Isle of Man.’

He added: ’(MNH) trustees are acting responsibly and in line with their charitable objectives.’

He invited the commissioners to apply for a grant for a scheme.

Arbory Commissioners said they were disappointed that the letter did not acknowledge the spirit of Mr Collister’s bequest but recognised that MNH were acting within their legal rights to ’ignore Mr Collister’s primary wishes’.

The authority will ask that improvements be made to the signage at Chapel Hill, Balladoole and will apply for funding for a Colby river heritage trail.