HUNDREDS of thousands of Scots are spiralling into debt by turning to payday loan companies or other expensive providers of credit to keep a roof over their heads, a survey has found.

The number of people turning to the much-criticised operators, whose interest charges can quickly rack up to several hundred per cent, is approaching one million across the UK, while a further six million are using an overdraft, credit cards or other loans to keep a roof over their heads, according to housing campaigner Shelter.

Shelter Scotland spokesman Gordon MacRae said the development was "extremely worrying", and that while payday loans may seem like a "quick fix" for those struggling to pay bills, the high interest rates could lead to them facing eviction and homelessness.

Independent MSP Margo MacDonald is urging the Westminster Government to take tougher action to regulate the payday loan companies, having been advised that her efforts to bring forward legislation at Holyrood would be outwith the Parliament's powers.

But Mike Dailly, of Govan Law Centre, is pressing her not to give up on Holyrood legislation as it could take years for Westminster to act. He argued that although financial and consumer law were reserved, debt was not, giving an opportunity to make money owed to payday loan companies or others charging sky-high rates unenforceable.

A YouGov survey for Shelter and Shelter Scotland found 2% of people had resorted to payday loan companies. With 47.8 million adults in Britain, the charity said that meant 936,000 could have used payday loans for mortgage or rent payments.

Some 15% of those surveyed said they had been forced to use an unauthorised overdraft, credit card, loan or payday loan for housing bills, an estimated seven million people.

Mr MacRae said: "These findings are extremely worrying and show that millions of households are desperately struggling to keep their homes.

"Payday loans may seem like a quick fix to pay for housing costs but with interest rates of up to 4000% annually they are completely unsustainable and can quickly lead to snowballing debt, eviction, repossession and ultimately homelessness."

Shelter Scotland found 41,553 households were accepted as homeless last year, a rise of 25% since 2001, and this total included more than 22,000 children.

The charity's law service has seen a 40% rise in the number of households seeking help because of the threat of repossession by their lender.

More than one in 10 people in the UK faces a constant struggle to pay their rent or mortgage, while 37% blame high housing costs as the cause of stress and depression in their families.

Last year the charity's Scottish helpline received almost 20,000 calls from people struggling to manage their finances.

Mr MacRae said: "Every two minutes someone in Britain faces the nightmare of losing their home. We urge anyone who is relying on credit to help pay their rent or mortgage to seek advice sooner rather than later."

Ms MacDonald added: "I get a sense that Westminster has woken up to the dangers of payday loans and is going to change its approach and look at some kind of legislation. I want to make it illegal to charge terms that amount to usury."

In the meantime she is asking the Scottish Government to do all it can to promote credit unions as an alternative source of loans.

Mr Dailly said: "I think we should press ahead in Scotland, making this class of debt unenforceable so that only the original debt has to be repaid, not the high interest charges."