Mar. 12--Once upon a time, long ago, the ministers who controlled the Post Office decided that it should offer the people this new-fangled telephone thingy. Ask nicely, wait for just a few months, and this revolutionary instrument could be yours. It might even work.

Roll forward a few decades; the two businesses have been split, and British Telecom becomes the first mass privatisation, plumped up and priced to go. Its pension fund (and that of the Post Office) is supposed to pay for all the fine public-sector promises of a comfortable retirement for their hundreds of thousands of employees. But this is a cloud no bigger than a man's hand, far away on the horizon.

A generation later, the true cost of these promises is only too apparent. An analysis from Morgan Stanley essentially concludes that today's BT is a massive pension scheme which is feeding off a decidedly anaemic telecoms business. The pension assets are £30 billion, while the market value of BT is little more than £6 billion.

Worse still, the fund has a vast deficit, which the brokers estimate at about £8.6 billion, which would require payments of at least £500 million a year for the next 15 years to bring back to balance. No wonder the shares have passed the low point reached during the previous management crisis; the dividend is again under threat.

Effectively, after 20 years in the private sector BT is now back to where it was in the bad old days, run primarily for the benefit of the workers, with the difference that it is now run for yesterday's workforce rather than today's.

Which brings us to BT's pension twin, the Royal Mail, where the problems are similarly intractable.

The current proposals to tackle them by selling a minority stake in the business have been explained in masterly Mandelsonian fashion, to the point where nobody outside his department can understand them. The pension deficit, and thus the need for £500 million a year cash payments, is much the same as that at BT, but even in a relatively good year like this one, Royal Mail's operating profits may not top £300 million.

Small wonder then that Jane Newell, the chairman of the Royal Mail pension trustees, wrote to Mandelson predicting a "grave crisis" in the fund unless the Government steps in. Under some of the well-meaning, botched legislation that is the hallmark of this administration, she might find herself personally liable for the shortfall. The subsequent revelation that she had not cleared the letter with all her fellow trustees looks like a typical Mandelsonian tactic to divert attention away from the real problem.