Holidaymakers are finding a chronic shortage of hire cars on the Continent. Spain and Portugal are the worst hit, with prices trebling or quadrupling. Problems are also being experienced in France and Italy.

Rental firms say they have not be able to buy enough vehicles because of a fall in manufacturing and tighter lending conditions. Small cars are in particularly short supply and holidaymakers arriving at airports expecting to find a fleet of bijou Seats, Fiats and Fords waiting are being disappointed. Lease Europe, the industry body for car hire companies, said firms had been unable to get the finance needed to expand their fleets and rules restricting the movement of vehicles across borders to meet demand had compounded the problem.

Independent reader Carl Whitaker was a victim of the squeeze when he was told the vehicle he had booked with was unavailable two days before his scheduled arrival at Palma airport for a fortnight's holiday. He was offered a Renault Clio, but "the cost had risen from the £197 I had been quoted to £843".

Car-hire firms have quoted £751 for a week's hire of a Volkswagen Golf at Alicante airport in Spain. In other cases, tourists have simply been told: 'Sorry, no cars are available."

Speaking last week, Stuart Nassos, managing director of the rental broker, Holiday Autos, blamed the shortage on the recession. "Car manufacturers have cut the number of cars being built, therefore fewer are available," he said. "Also there is a lack of credit. The two combine to create 'a perfect storm'."

He advised holidaymakers not to rely on an airport booking, which may be cancelled at short notice, but to book cars from city-centre locations.

Holidaymakers putting off holiday plans until the last moment because of the recession, have exacerbated the pressure, according to Michel Taride, president of Hertz Europe. He told the BBC: "There's a seasonal shortage of rental cars every summer, but it seems to be more acute this year because carmakers have cut production due to the uncertain economy. There has been a big increase in domestic and US inbound travel, and holidaymakers are deciding to go away at the last minute."

Some car hire companies are bringing older cars into service to meet the increased demand.

The Independent's travel editor, Simon Calder, suggested holidaymakers consider travelling on efficient Continental railways, many of which have scenic views.