£5million lotto winner goes from millionaire to the dole in just three years

For ex-soldier Peter Kyle, a golden future filled with luxury and leisure beckoned.

But today, the 55-year-old is virtually destitute and claiming benefits after apparently managing to spend all his cash.

It is claimed that he owes money he cannot afford to repay.

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Kyle is said to be living in a budget guesthouse where he earns his board and lodging by doing odd jobs for the owner. It is a far cry from the £550,000 property he bought with his winnings and has now been forced to sell.

Yesterday a source told a newspaper that Mr Kyle, who is divorced, lost his money after making a string of ill-advised investments.

The source said: "He had a golden opportunity to turn his life around - and then blew it. He took some bad advice from bad people and handed his money over too readily to them. Now he's got nothing and even owes cash."

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Yesterday the former Royal Artillery gunner was unavailable to comment on his journey from rags to riches and back again.

He scooped his fortune in February 2005 and during a celebratory game of bingo won another £500. Friends say he spent his lottery winnings on the spacious house as well as a £40,000 Mercedes, a £40,000 Range Rover and another vehicle.

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He also gave money to his children, 23-year-old Gemma and 14-year-old Roy. But Mr Kyle was also the target of accusations that he had refused to give financial support to four of his siblings, all of whom were suffering from Huntington's disease.

He denied this, but is believed to have spent the majority of his money on investments with the "help" of his friends.

Now he is said to be living at a £15 per night guesthouse in his hometown of Plymouth. It is next to a sex shop and opposite a tattoo parlour.

A source told The Sun: "Pete has been working at the hotel for a few months just to get by. He has his own room, marked prithevate, and he spends a lot of time there. He shuffles around and cooks breakfast for the punters and is a general dogsbody for the owner."

It is believed Mr Kyle has been claiming benefits for several months, and in January, an anonymous creditor secured a county court injunction against him in Northampton for £590.

The house he used to own is on outskirts of Plymouth and has electric gates, a double garage and large gardens. Yesterday, neighbours claimed the property had been repossessed.

The current owner is believed to be a builder who did work for Mr Kyle on the property but was not paid - and later negotiated a deal to buy it.

Some ex-neighbours of the lottery loser are not sorry he has gone.

Moira Johnson, 50, said: "Some people do get what they deserve - he really is a nasty piece of work. I had a run-in with him once when a friend of mine was stuck and I needed to take them a car battery charger.

"I knocked on his door and he started screaming blue murder at me right in my face, calling me every name under the sun. His language was appalling.

"No one liked him around here and everybody had had some run-in with him at some stage. We were very glad when he left."

Another neighbour, who did not want to be named, said: 'He was very into his flashy cars.

"This is a narrow private road and normally neighbours wait and let each other pass, but he would always barge down and force you to reverse. "He was arrogant and foul-mouthed - not a very nice man at all. I sensed he was a bit of a loner, though.

"There weren't many visitors and I think he was single. It doesn't surprise me that he has lost his money, because he did a ridiculous amount of pointless building work and drove top-of-the-range cars. We never mixed with him at all."