Stamp collecting is licked by children's love of computer games and television

When it comes to a choice between playing Grand Theft Auto on a games console and searching for non-perforations or a Swedish Three Skilling Blanco, there is no contest for the modern youngster.

When it comes to a choice between playing Grand Theft Auto on a games console and searching for non-perforations or a Swedish Three Skilling Blanco, there is no contest for the modern youngster.

At least, that was the conclusion reached by the members of the North Western Federation of Philatelic Societies after they set out to find a recipient for £2,500 of lottery money to welcome a new generation of children into the world of stamp collecting.

When the group wrote to 120 schools inviting headteachers to enter a competition to interest pupils in the joys of a first day fauna cover or steaming a first-class stamp off anenvelope, no one replied.

The failure of the initiative, which has resulted in the lottery grant staying dormant in a bank account until the federation tries again in Liverpool in February, has led to concerns that the charms of the most traditional of childhood hobbies are increasingly lost on children of the computer age.

Adrian Jones, secretary of the federation, said: "It is disappointing not to have received a single reply. But we are in a very crowded marketplace when it comes to attracting youngsters.

"They are often more interested in PlayStations, watching television or football clubs. There is a perception that the pleasures of stamp collecting are not so relevant in this century."

A study by the Royal Mail, found that about 10 per cent of children have a stamp collection, representing about 1.1 million children under 14 years of age in England and Wales. Experts admit the figure is a fraction of that in the heyday of philately, when almost every child had a stamp album and hankered for a prized Penny Black. But they insist that philately among children is alive and well, citing an effort by the Royal Mail to promote collecting by recreating a life-sized version of Postman Pat's village and numerous school stamp clubs.

Hugh Jeffries, the editor of Gibbons Stamp Monthly and the Stanley Gibbons catalogues, said: "I don't think there is any doubt that there are far fewer young stamp collectors today than there were 20 years ago. I suppose the sort of parent-to-child link that perpetuated stamp collecting died out in the last decade or so, because there are so many other forms of entertainment now. But there is still a strong following. A lot of work is done to encourage interest in schools. The result is areas of the country where participation is very strong."

Supporters of the youth stamp market point out that rather than the traditional emphasis on a single country, philately hasdiversified into themed collections, allowing youngsters to collect stamps depicting sports, history, celebrities and royalty. A vibrant internet trade has also sprung up with auction websites such as eBay, facilitating the sort of bulk trade in cheap stamps that forms the mainstay of many a childhood collection and has disappeared from high street stores.

But philatelists at the more refined end of the market are enjoying one of the best booms in the industry in decades as City investors faced with sluggish stock markets return to their childhood hobby to benefit from an average annualincrease of 10 per cent in the value of rare stamps over the past five years.

Stanley Gibbons, the London-based dealer who holds the world's largest stock of stamps, reported a 71 per cent increase in sales this year of the 10 most commonly traded stamps from the previous 12 months. But according to the few stamp collectors whose evangelical enthusiasm takes them into schools on a regular basis, it is not the prospect of making a fast buck which motivates new converts to the hobby.

Erene Grieve, 60, an Open University lecturer and a stamp collector since the age of nine, has visited 120 schools as a member of the National Youth Stamp Committee, which is charged with trying to interest youngsters. She said: "I think among the stamp collecting establishment there is a degree of scepticism about whether there is any hope or chance of getting kids into stamps.

"But if you get into those classrooms, the effect can be instant. The same motivations that applied 50 years ago, apply today: that hint of a foreign land, a stamp that has travelled thousands of miles. Sometimes, however, I do feel a bit of a lonely figure."