Steve James is a softly- spoken, modest man who doesn't like to make a fuss. At 52, he would like to live quietly and work on his building projects in peace. But he has one deeply-held belief: that people should be able to live a simpler, greener way of life in a home they have built themselves, at a price they can afford.

Three years ago, he set out to prove it could be done, in the hope he could inspire others before it was too late. With very little money, he began building his own experimental straw-bale home from scratch, on land borrowed from a friend. He learned as he went, setting up eco-build workshops and a website charting the construction of the house. He spent hours sharing his knowledge with people from all over the world who shared his dream of living simply, with no impact on the planet.

However, it emerged this week that, in showing others how they can build their dream home, he has probably lost his own. His landlord is threatening to evict him after council officers discovered James had fallen foul of planning regulations.

James, who spent less than £4000 building the self-sustainable house near Dalmellington in Ayrshire, says he is heartbroken by the development and is due to meet officials on Tuesday. There is no question of any legal action and they say they only want to discuss his options - but while he hasn't lost hope, the outlook is bleak.

Since the furore about the house in the press this week, his landlord, Geoff Forrest, who started out by supporting his friend in his dream of inspiring others to build green, has now said he wants him to leave.

"It's heartbreaking really, but also kind of inevitable," says James. "It's ironic, too. The reaction to my small house has been huge. While it has proved that thousands of people want to be able to live like this, the issues remain the same; unless you happen to have lots of money and can buy a small piece of land, you can't even get off the ground."

James believes his house has worked out better than he could ever have expected. It was the perfect design: warm, dry and watertight, it was made almost entirely from reclaimed materials, was entirely self-sustainable and was beautiful to look at.

But James's project came with a risk. When he began the work, he had no idea if the house would work out, or even what it would look like - and, since he didn't own the land, he believed there was little point in trying to get formal planning permission. He also felt that, with Earth's resources drying up around us, there was no time to lose in trying to get the house built and proving it could be done.

While the Scottish Executive claims to support sustainable building developments, permission is given only for land that has already been designated for building in the local area plans. Most of these designated areas are already owned by developers.

James hoped his eco-house might help kick-start a long-term change. He thought it could help lead to new policies to introduce pockets of eco-villages across Scotland's underpopulated rural areas, giving people an escape route from a life of mortgage debt. "It's easy to give permission for a development of 50 executive homes to a big developer, but there is absolutely no strategy in place for how to handle half an acre for a man or woman who wants to build their own eco-friendly home," he says sadly.

In the beginning, the council was unaware of James's house. Indeed, it blended in so well with the landscape that it could have been many years before it was discovered. He had a choice: a quiet life by the loch, or risking everything and going public, in the hope that change could be made. He went public.

The Herald interviewed James last year and provided a step-by-step guide on how to build your own straw-bale house. People fell in love with the pictures of the whitewashed cottage; with its sculpted walls and the flowers growing on its turf roof. They adored its polished wood floors, hand-built stove and reclaimed designer-style kitchen. People wanted to know how James had built his reed-bed filtration systems, his shower room and his compost loo. They were especially keen on the fact he had built it for less money than many of us would pay for a new sofa.

The BBC followed up the story on its website and within hours James's phone was ringing constantly with inquiries from national radio and TV, magazines and newspapers. Within two days he had had more than 20,000 visits to his website, and hundreds of e-mails. A Russian film crew arrived to make a documentary. A Chinese construction firm asked if it could translate his website and hire him as a consultant for eco- house projects.

James was completely overwhelmed, and becoming worried. A few days later, inevitably, a reporter got on to East Ayrshire council. James knew it was time to come clean, and rang the planners.

"I don't blame the planning officers - in fact, they have been really sympathetic. But they simply don't have the power or the legislation to make things better.

"The whole planning system needs kicking into shape. There is plenty of land available - especially in Scotland - but it's all owned by a handful of big landowners and corporations and the councils are bound by them."

James is hoping he may be able to persuade the council, and Geoff Forrest, to allow the house to stay in place, and be used as an education site or even a tourist attraction. East Ayrshire council says it will follow up the meeting on Tuesday with a site visit and make a decision after that. Retrospective planning permission might have been possible, the council says, but it would have depended on the landlord's approval. James accepts this is unlikely and is ready to pack his bags.

"It's very sad to think I may have to leave my home, the home that I and so many others worked so hard to build - but really, this was never about me," he says. "It was about proving to people that it could be done; that we can make a real, positive difference to the way we live. Hopefully it's started something off and, if losing my home gets any moves in the right direction - well, it will have been worth it.

"I'm not going to hang around. The Earth's resources are running out fast and we have got to help people find a better way to live, right now."

James is now hoping he can find a new piece of land to build on, and wants to work with the council to set up a demonstration eco-village based on his original designs. "It would be so easy to do," he says. "It could happen tomorrow."

Meanwhile, he is musing philosophically on the question of the offer of consultancy work from the Chinese company. "How ironic it would be if I end up helping China build villages of sustainable homes all over their country, while Scotland is still stuck at the starting post."