Too much debt and regulation is "running down" the institution of the British pub, the founder of JD Wetherspoon has warned.

Tim Martin, chairman of the leading pub chain, said private equity groups and property investors were having a "pretty disastrous" effect on the industry by taking on excessive debt.

He told the Financial Times: "Because pubs are so loaded up with debt and regulations, not enough money has been going back into the pubs.

"So a lot of pubs have become run down. Landlords have been paying too much rent and are unable to provide service and prices that are attractive enough to customers."

Shares in pub companies have been hammered as investors worry over the strain of recession, the impact of smoking bans and rising costs on balance sheets loaded with debts.

Other headaches for pubs include competition from cheap supermarket alcohol, Government duty hikes and increasing regulation.

The British Beer & Pub Association, whose members account for 98% of beer brewed in the UK, said the cost of implementing new sector-specific regulation - including the Licensing Act 2003, changes to gambling, food hygiene legislation and the smoking ban - had been "huge".

Last month's rescue of the pubs and restaurants firm Orchid put a fresh spotlight on the growing pressures faced by the beleaguered sector.

Orchid's administration and sale to existing management - while spun as a financial restructuring to "recession-proof" the firm - still left 48 pubs with administrator PricewaterhouseCoopers.

Mr Martin's comments came after private equity veteran Jon Moulton - who made 85 million by selling the InnSpired chain to Punch in 2004 - said in an interview that much of the debt carried by the sector was "unsustainable".

Mr Moulton claimed many balance sheets were looking "desperately inappropriate" for a falling market - adding to growing question marks over the leased pub companies' business models, where tenants are tied into buying their beer from landlords instead of looking for cheaper alternatives, as well as paying rent.

Meanwhile JD Wetherspoon has fared better than many of its competitors, opening 20 new pubs in the last few months of 2008, creating hundreds of new jobs.

The New Year saw the chain, which operates more than 700 pubs across the UK, introduce offers including a pint of beer for less than £1, down to 1989 prices, and a number of meals at £2.99.

Mr Martin said: "By charging low prices, we attract large numbers of students and pensioners: people with low discretionary income but who, as regulars, can generate high volumes."