For two-dimensional boundary integral equations of the first kind with logarithmic keels,the use of the conventional boundary element methods gives linear systems with dense matrix.In a recent work [J.Comput.Math.,22 (2004),pp.287-298],it is demonstrated that the dense matrix can be replaced by a sparse one if appropriate graded meshes are used in the quadrature rules.The numerical experiments also indicate that the proposed numerical methods require less computational time than the conventional ones while the formal rate of convergence can be preserved.The purpose of this work is to establish a stability and convergence theory for this fast numerical method.The stability analysis depends on a decomposition of the coefficient matrix for the collocation equation.The formal orders of convergence observed in the numerical experiments are proved rigorously.