THE sale of a Royal British Legion building in Princes Risborough was unlawful, an official report has revealed.

The charity has discovered it failed to comply with charity and trust law when it sold a number of branch properties.

The Memorial Hall in Bell Street in Princes Risborough was sold in 2011 to the Chilterns Christian Fellowship, which is part of the Elim Church. Since then the branch has not had a permanent base.

At Wednesday night's annual town council meeting there were gasps from the public gathered when Mayor Gary Hall said: "I can reveal this evening an official report shows that the sale process to the Elim Church was unlawful. "That to me is quite a big scandal.

"There is going to be a lot of bad feeling. "People are already asking if the Elim Church will have to sell it back.

"We don't know. This is all speculation. There are going to be a lot of things to come out.

"£18m has been frozen within their [RBL] accounts.

"The Royal British Legion have admitted they have messed up very badly."

The report said the Legion has discovered a number of failings in past management and administration of Branch Property Trusts (BPTs) which relate to how rental and investment income has been used, and also the failure to give public notice when disposing of these properties- a legal requirement.

It was in 2011 that the Legion set up a review to identify how BPTs could be used most effectively and to see if they were complying with current requirements under charity and trust law, which uncovered the inadequacy of the systems in place for BPTs.

The report said this has meant the income received from the branch properties has been used for the general purposes of branches - even though it should only be used for the narrower purposes of each branch.

It said: "We have inadvertently omitted part of the legal process we should have followed when we sold properties. Since 1993 it has been a legal requirement under charity law to give public notice before we sell BPT properties but we are unable to confirm that this has been done in all cases."

It revealed £18 million in the charity's accounts has been moved from unrestricted to restricted funds.

A spokesman from the Royal British Legion said: "As part of an internal review, we have found a number of long standing compliance failings in the way we administer and manage our Branch Property Trusts. These trusts direct the governance of many of the Branch connected properties that the charity has acquired since 1921, and how revenues from these properties may be spent.

"Legal advice is very clear that the Legion must address these issues immediately in order to comply with charity and trust law.

"We want to brief affected Branches as soon as possible to explain the issues we have identified, and we are arranging a programme of visits throughout April and early May to do so. We need to work together to resolve this issue and we will be able to provide further detail about how we aim to do this once these initial visits have been completed."