Research students are teaching first-year undergraduates in many universities when less than a third of them have received training, according to a union survey to be published in July.
The findings also reveal that 20 per cent of teacher-students are lecturing to final-year undergraduates and even postgraduates.
The Association of University Teachers, which carried out the survey, said the extent of this "alarming practice" had gone unreported and had grown from an occasional adjunct to formal teaching into a "desperate measure" to make ends meet.
The results of the survey of teaching on more than 420 higher education courses are being sent to the Department for Education and Employment next week.
The AUT said: "It is not possible for the existing number of permanent staff to deal with the current number of students and much of the overload is being soaked up by inexperienced, under trained and very badly paid research students who, through no fault of their own, are unable to provide the quality of teaching which established staff deliver."
Almost half of teacher-students had no subject or research training and over two-thirds had received no training in teaching.
The hourly pay was as low as Pounds 2.79.
The AUT stressed that limited teaching duties had always been an acceptable way to provide small group seminars for undergraduates or specialist discussion groups, laboratory demonstrations or assistance with practical work.
Such teaching has also been an acceptable way for research students to gain valuable experience and supplement their income. However the report says the use of postgraduates as stand-in teachers has now gone too far.
Ewan Gillon, general secretary of the National Postgraduate Committee, agreed and criticised the level of pay. "It is essential that universities offer anyone undertaking teaching duties appropriate levels of training and support," he said.