Anyway, the other day, after being in the garage with the heater on
for a couple of hours, I unlugged it and noticed that the plug was
warm, rather foolishly I stuck my finger on the prongs and the live
one was bloody hot.
Can anyone tell me whats causing this and what I can do to fix it as
I'm a bit scared of melting the socket or burning the garage down.

Could be a loose connection in the socket you were plugged into...

If the pin was that hot, it might be worth checking the connections in
the plug itself in case of heat damage there, and it might be worth
considering throwing away the old extension lead as well (heat can weaken
the contacts in the socket, which will only make the problem
progressively worse.

If the 2 way extension lead was on a reel, it may be that the load and
inductive resistance (the magnetic field caused by the load can
affect the way the cable copes with the load*) caused the heat - if
you`re going to use a heavy load on an extension reel it`s wise to fully
unwind it first.

For distribution purposes, electricity supply companies used (some may
still use) "reactors" on the 33Kv network - these are essentially big
coils of wire, much like a cable reel, but in fault conditions the
magnetic field caused by the attempt to draw excess current would limit
the total amount of current that could feed into the fault.

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