Heroin use in Dublin is continuing to grow, according to the annual report of Merchants Quay Ireland.

The charity, which provides support and counselling to drug users, the homeless and prisoners, also says there is further evidence the drug problem is continuing to rise outside of the capital.

Merchants Quay's needle exchange programme in Dublin dealt with almost two new drug users every day last year, it says this is evidence that the heroin problem in the city is growing.

Services in midland counties are now dealing with over 350 drug users and family members.

The annual report says that towns such as Athlone, Portlaoise, Birr and Longford experienced a growing and significant problem with heroin and cocaine in the last year, as well as substances from 'head shops'.

Last year Merchants Quay Ireland provided services to almost 1,200 prisoners, more than half of whom were using heroin, 18% of prisoners seeking support suffered alcohol addiction while in prison.

Despite the increase in workload, income for the charity was down last year and it is predicting a further cutback in State funding this year.