Nearly 300 people a day declared themselves insolvent last year as Britain’s debt crisis claimed a record number of victims, official figures showed yesterday.

The Insolvency Service said that a total of 107,288 personal bankruptcies, insolvencies or individual voluntary arrangements (IVAs) were taken out in England and Wales in 2006 — a record and 59 per cent up on the year before.

Experts immediately gave warning that the scale of the problem was going to get worse this year as consumers began to pay the price for chronic overspending in the first half of the decade.

Baker Tilly, the insolvency specialist, said: “We believe that total personal insolvencies will be between 130,000 and 150,000 — another record figure.

“People are, without doubt, behaving irresponsibly with credit, blindly taking on debt without thinking about how they will repay it.”

Opposition MPs criticised Gordon Brown and said that another rise in interest rates next week could tip thousands more homeowners over the edge.

George Osborne, the Shadow Chancellor, said: “Rising insolvencies are just the latest symptom of an economy built on debt and Gordon Brown is to blame.”

Personal debt stands at nearly £1,300 billion. This week the Council of Mortgage Lenders announced a 65 per cent rise in the number of homes that had been repossessed across the UK in 2006.

The Insolvency Service said that the number of personal insolvencies jumped 44.1 per cent to 29,804 between October and December, fuelled by an 81.9 per cent increase in the number of individual voluntary arrangements to 12,741.

Consumer watchdogs said that the dramatic rise would raise fresh concerns about the regulation of individual voluntary arrangements specialists, who, for a fee, set up formal agreements between debtors and creditors as an alternative to bankrutpcy.

Banks argue that a new generation of “ambulance chasers” are luring people struggling with debt into IVAs, when they would be better off going bankrupt or talking to their bank manager.

Sue Edwards, senior debt policy officer at the Citizens Advice Bureau, said that IVAs could leave people with debt problems paying off more interest than before.

She said that there had to be affordable options in place to tackle the growing crisis. “There are thousands of people who have substantial debt and will never be able to pay it off,” she said.

Corporate insolvencies rose 1.8 per cent in 2006 to 13,137, but there was a 20 per cent jump in administrations affecting larger companies.

Malcolm Shierson, Grant Thornton’s corporate recovery partner, said that the figures showed that more companies were opting for financial restructuring, with insolvency seen as a “last resort”.

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