The Method of Fundamental Solutions (MFS) is a boundary-type
meshless method for the solution of certain elliptic boundary
value problems. In this work, we investigate the properties of the
matrices that arise when the MFS is applied to the
Dirichlet problem for Laplace's equation in a disk. In particular,
we study the behaviour of the eigenvalues of these matrices and
the cases in which they vanish. Based on this, we propose a
modified efficient numerical algorithm for the solution of the
problem which is applicable even in the cases when the MFS matrix
might be singular. We prove the convergence of the method for
analytic boundary data and perform a stability analysis of the method
with respect to the distance of the singularities from the origin
and the number of degrees of freedom. Finally, we
test the algorithm numerically.