Other charities for the blind are angry that, while they are short of money, the guide dogs' association refuses to help them out or to scale down its appeals for further donations from the public.
The pounds 160m reserve would allow the association to run its services for six years without collecting another penny.
It has built up its fortune because only 4,100 of the estimated 300,000 blind and visually impaired people in the country are willing or able to use a dog.
Other charities say that some of the surplus could be transferred to help services for blind people such as education, training and help in the home.
The Royal National Institute for the Blind had to use its reserves last year to make up a pounds 1.4m shortfall. It now holds enough in reserve to operate for only 24 weeks.
The guide dog association's accounts show it spent pounds 25m on services for the blind last year and also added pounds 1m to its reserves of cash and investment which now stand at pounds 160m.
Richard Fries, the Chief Charity Commissioner, said that accountants from the commission were having 'constructive and specific negotiations about the money'.
The commission was also discussing 'how the charity could use its wealth to fund other services for the visually impaired'. He added that, in response to public concern, he would be issuing stricter rules on the holding of reserves later this year, which may limit the campaigns of rich charities.
But a spokeswoman for the guide dogs' association said last week: 'There is no evidence to suggest that people will give money to other charities if we stopped fund-raising. People give to dogs not to blind people.'
Doug Clasper, chairman of the Friends of Moorfield Eye Hospital in London, the country's leading centre for treating the visually impaired, said yesterday: 'We are aware of the surplus and it does beg the question what are they going to use the money for? I think they should take the decision in principle to fund other blind charities.'
Guide Dogs for the Blind, however, said that, though it sometimes takes part in joint ventures, its rules prevent it from funding other charities.
But a spokesman for the Charity Commission said it would be easy for the association to change its articles.
David Blunkett, Labour's health spokesman and a trustee of Guide Dogs for the Blind, accused the commission of persecuting the association. 'There are one or two commissioners who have a vendetta against us,' he said last week. Mr Blunkett, who has been blind since birth and has a guide dog called Lucy, said the association wanted to increase the number of guide dogs in Britain to 5,000.
Earlier this month the association launched Guide Dog Week, using newspaper advertisements to raise funds.Reuse content