Earlier this month, I had the disturbing thought that we Christians would never be able to put across the true meaning of Christmas until we had suppressed children's nativity plays. I put the idea to a meeting of clergy in inner-city Leeds. How, I asked, are we to get it over that Christmas is not a fairy-tale?

None of the clergy present exploded, and several expressed great relief that the point had been raised. But, they asked, how do we handle this?

How indeed? The question is sharply posed by the reported fate of the vicar who attempted to tackle this very question just before his parish nativity play. Angry parents forced him to apologise for the distress to their children, who now even doubted the reality of Father Christmas and the Tooth Fairy.

I am not unduly bothered about the Tooth Fairy. Surely it can be openly declared as a family custom that each first tooth, as it is shed, can be exchanged for additional pocket money. This should be according to an agreed tariff, which may be varied for inflation and can be withheld if the state of the family economy no longer permits such welfare payments. Such a realistic approach should help the growing child to come to terms with the prevailing realities of the market economy in the adult world.

Father Christmas may be a different matter. It seems sad to do away with the magic that I saw shining in the eyes of our second son, whom I had heard stirring when I was creeping to bed on Christmas Eve after leaving the presents. All he said was: "He's come." He then exercised enormous discipline by going to sleep until the permitted hour on Christmas morning. Both he and his brother seemed quite capable of enjoying the magic, growing out of it and then rejoining it for the benefit of their younger sisters in due course.

What is wrong with co-operating in children's games that say something about real (although not guaranteed) possibilities of giving and receiving presents which, sometimes, fulfil one's wishes? What is wrong, at a particular season, with focusing on giving, sharing, enjoying and celebrating? What is wrong with attending to stories of great beauty and power that claim to reveal the possibilities for human being and divine being? All this should be taken not literally but seriously - and with as much hope and celebration as we can honestly offer.

But fairy-tales are out. The world is too tough for them. So are the biblical nativity stories. Fairy-tales whose point is cash for shed teeth or expensive presents do not have much magic or wonder in them, anyway. Perhaps the troubled vicar should not have apologised but tackled the parents about their dull materialism.

The story of the baby to which Mary gave birth is about the man God chose to become. The angels convey messages from God about possibilities of peace and hope in the dark world. The three magicians from the East express the searchings of the Gentiles for a common star to follow. The stories also include homelessness, murder of the innocents and flight into exile. The world of the nativity stories is recognisably real. Their claim is about the presence and activity of God with us, in and through it all.

Compared with this, the Tooth Fairy is nothing. Now that Father Christmas is almost entirely met with in department stores perhaps he, also, is ready to fade out - but not the claim, the faith and the hope that God is with us.

The writer was Bishop of Durham, 1984-94.