I hope I am wrong, but.....
Looking at it, it appears that the tyre has rubbed through the wheel arch cover.
If so then you have a far more serious issue, the rubber in the suspension has compressed too much.
There is NO easy cure for that, you will need a replacement/refurbished axle!!
Sadly It's not an unknown issue,
a Quick Google search for "Alko axle collapse" will provide loads of info.
Sorry to be the bearer of bad news, and I really hope I am wrong.,