The consultation document was due for release this month, but Treasury officials have admitted that it had taken 'slighty longer' than they had anticipated to draw up, and promised that the process would get underway properly in January 2002.

However, even when it does arrive, those expecting sweeping changes are likely to be disappointed, as it is thought that the document will contain only modest reforms within the existing structure.

With taxpayer patience already stretched to breaking point, the government are concerned that any changes to the annuity system do not increase the strain on the public purse. The tax authorities are also concerned that amendments to the legislation do not allow wealthier pensioners and their families to slip through the inheritance tax net.