Peugeot 106 : Problem with brakes

Stop driving it now.

The handbrake is not really connected to the front brakes. You can adjust the cable fairly easily (on my wife's N reg anyway) by climbing under the car and tightening the cable adjuster situated roughly in the centre of the car. However I would suggest that more investigation is needed first.

Are the rear brake shoes worn? Does the rear brake shoe adjuster work? If the shoes have reached the limit of wear/adjustment this could cause a slippy handbrake and make also make the brakes feel spongy.

With the front brakes it may be possible that the piston/caliper is sticking and the clunk you hear is it breaking free or being affected by worn/sticking rear brakes.

To check the rear brakes you'll need a 32mm socket and a Haynes manual although the one for the 106 isn't particularly brilliant. Having just spent

6 hours working on the brakes on my wife's car in the freezing cold I can fairly safely say that I only turned to the manual once.

You say you had the pads replaced, so who did it? Go back and complain, as they clearly got it wrong. And don't accept any bullsh1t about them needing time to bed in. However, as Malc says, the handbrake is another thing.