In past years, the group has made what it terms "ex-gratia" payments to pensioners under a plan set up before Conrad Black, the Canadian media baron, bought a stake in the titles in 1986. The payments had been aimed at keeping pension cheques in line with inflation.
The original pension plan had been non-contributable for employees, and subsequent payments topped up by the company were seen as a moral rather than a legal requirement.
In a letter addressed to pensioners, and sent just two days before Christmas, Jeremy Deedes, the managing director, wrote: "The company has had a reasonable but not particularly good year. Indeed, its trading profit has fallen short of the 1996 budget because of the intensive competition." The letter was seen by pensioners last night as a concession from the Telegraph that competition from the Times, Rupert Murdoch's flagship quality daily, had taken its toll.
Mr Deedes also told pensioners that an ex-gratia payment for 1996 would have had "an adverse impact on the share price of the parent company on overseas stock exchanges, and was judged an unfair taxation of those shareholders who have already paid the heavy cost of privatising the Telegraph".