Unable to read settings for ~/Library/Keychains/login.keychain

I bought myself a 13" Macbook Air at Christmas, and since travelling to Prague for a holiday I've been having problems with my keychain. Everytime I log in I am being prompted for the login keychain password as a tonne of applications want to use it, and then intermittently throughout using the Mac it keeps popping up and asking me for the login keychain password.

I've run the keychain first aid repair tool and get the following message:

Repair started

Checking keychain configuration for grchughes (user ID=501)

Home directory is /Users/grchughes

Checked login keychain

Unable to read settings for ~/Library/Keychains/login.keychain

Checked default keychain

Checked contents of ~/Library/Keychains/login.keychain

Warning: some problems were not fixed

Repair failed

Can anyone help?