The trust bought a terrace of Georgian cottages, the village pub and the post office in Cwmdu, near Llandeilo, for pounds 500,000. They had been owned by Annie Griffiths and her family since the last century. Peter Mitchell, the trust's regional director, said: 'If we had not acted, the hamlet would not have survived. It would have been easier to do nothing, but these traditional communities need to be preserved.'
Villagers say that the purchase has attracted a London property speculator and - perhaps worst of all in their eyes - brought in English settlers. The incomers include a National Trust officer, Philip James (although the trust points out his father is Welsh).
Part of the pounds 500,000 finance for the scheme was secured through a senior National Trust official's brother-in-law. That relative's former business partner is is now hoping to convert the local school into five houses. To encourage a landlord to take the pub and shop, the three terrace houses will become holiday lets.
The letters page of the local newspaper has been filled with complaints about the development. Two members of the Welsh Language Society were arrested when the school was auctioned.
The National Heritage Memorial Fund provided pounds 250,000 of the purchase price. One resident, David Davies, has written to the fund, objecting to the development. He said: 'I was born about six miles from Cwmdu. Both villages then were 100 per cent Welsh. Now only two residents in Cwmdu village speak Welsh.'
Hywell Jones, whose father was blacksmith in the hamlet, said: 'There is no way you can preserve the Welshness of Cwmdu when you are putting holiday lets in. We don't want to be Wales's answer to the Cotswolds.'
But not all locals are unhappy. The chapel and vestry have been taken over by the National Trust and the local minister, the Rev John Young, said: 'The terrace could have been turned into anything and we would have had no control. We are delighted.'
The scheme's financing has also proved an embarrassment to the trust. Richard Keen, its historic buildings representative in Wales, said an agreement was reached with the Canadian Imperial Bank of Commerce, which bought the terrace for the trust until it could put together a financial package. The negotiations were with his brother-in-law, Roland Williams. 'We didn't have any money in the kitty and it was the only way to buy the property.'
Mr Williams independently set up a property company with Edward Peshall, who has bought the school and wants to build houses on the site. A planning inquiry will be held in June. The National Trust is among the objectors.