Barclays, the corporate trustee of the £319m National Fund created by an anonymous donor in 1927 to pay off the national debt, is in negotiations with the Charity Commission to turn it into a grant-making trust

The National Fund is Britain’s 29th-richest charity, was set up with a £500,000 investment, with a plan to grow the funds in the stock market until it became large enough to pay off the national debt.

The fund is seen as unlikely to succeed in its objects of paying off the whole or a large part of the national debt, which, as of today, stands around £980bn.

It has carried out little or no charitable activity since it was established, and its only recent payments have been governance costs and investment management fees, which totalled £350,000 last year.

Barclays Fiduciary Services took over its management in 2009, when it bought the former corporate trustee Northern Trust Fiduciary Services.

"We’ve been working ever since we became the trustee to change the original objects, which say the funds can be used only to pay off the national debt," said a spokesman for Barclays. "We’re working with the Charity Commission to look at how to turn it into a grant-making trust."

A spokeswoman for the Charity Commission said in a statement: "We are currently in contact with the representatives of the trustee of the National Fund, who are considering how best to run the charity given the modern context in which it now operates."