Chief executive Michael Somers said the NTMA is in discussions with a number of service providers about the new online products, which could include an index fund tracking the performance of government gilts. The eventual deal could be modelled on the NTMA's existing joint venture with Kerry-based financial services group Fexco, which operates the prize bonds scheme.

Any move towards webbased saving could spell further trouble for An Post which got 37.5m from the NTMA last year to operate existing governmentbacked schemes including savings certs, savings bonds and the post office savings bank. These schemes have attracted 5.7bn from savers, largely because returns are tax-free. Fexco received 7m for operating the prize bonds.

But the NTMA is disputing An Post's bill for operating these accounts, freezing the fees for the last two years. Somers said the NTMA pays a gross return of about 4% a year on savings certs but, after An Post has taken its cut, the public only gets 2.7%.

"We've ongoing difficulties with An Post over the administration charges they want us to pay, " he said.

"We've said we're not going to pay them anymore.

They're too high and a source of considerable annoyance."

Any move by the NTMA to bypass the post office by selling government savings online would further erode An Post's shaky revenue base. Last week the European Court of Justice ruled that government broke EU law when it gave An Post an exclusive 47.5m contract to distribute social welfare cheques.

The NTMA's relations with the post office are also threatened by An Post's decision to form a new joint venture with a DutchBelgian bank, Fortis, aimed at selling a broader range of financial services through the post office network.

"We don't have the capability of running retail savings products ourselves and that's why we'll need an outside service provider if we go ahead with these products, " said Somers. "It needn't necessarily be a bank. It could be an arrangement a bit like the one we already have with Fexco."

He said the government would have to approve any new products that the NTMA intends to introduce, although it is unlikely they would also have to be signed off by the Financial Regulator. "There's no risk associated with what we're at, " he said.