You had to feel sorry for cable company giant Cable & Wireless Communications. Undaunted by its recent takeover by rival NTL, the company pressed ahead with a demonstration for journalists of its new digital interactive TV service in Manchester: executive jet from London City, coach to the home of a local employee, caterers, platoons of PR folk and technicians.

Only to discover when they turned the set on that they had no picture. If the millions of customers who never stop grumbling about the poor quality of cable TV customer service had seen the speed with which, not one but two, CWC vans arrived to change the fuse in the box at the corner of the street, they'd have rebelled.

But once the hardware was working, the service - though in its early stages - was impressive. Some 10,000 customers in the Manchester area have gone digital, complete with about 100 channels. The Sky Box office pay-per-view service and an electronic programme guide (EPG) is currently more sophisticated than that provided to Sky subscribers.

But some viewers have got more. They can use their TV sets to send and receive e-mails and to buy things from retailers such as Littlewoods and Tesco (though since Tesco Direct currently delivers only in the London area, this is of questionable benefit).

They can also play simple computer games, and use the TV to surf a limited number of Internet sites, specially-redesigned to look good on a television screen when seen from a sofa rather than close up on a PC monitor. There are news sites from ITN, Teletext and Electronic Telegraph, entertainment from the likes of Cartoon Network and local Yellow Pages-style information from Scoot.

Most of these services are accessed using CWC's digital set-top box and a remote control, for a monthly subscription of Pounds 9.98, which includes digital versions of channels one to five and a phoneline, and no usage charges. For e-mail, a small keyboard can be linked by infra- red to the television for an extra Pounds 30. The service will be properly launched in October.

CWC's two big cable rivals, NTL and Telewest, are developing similar services, though neither will be operational before next year, and NTL already has an analogue service called TV Internet.

Sky Digital subscribers now have access to a preview service from Open, the joint venture company formed by BSkyB, BT, HSBC and Matsushita. Woolworths and two sports retailers, one of them Manchester United, are already offering merchandise for sale; viewers can play very simple versions of computer games like Minesweeper; and they can visit sites devoted to travel which combine text information about different destinations with moving video.

There are interactive advertisements for brands such Persil and Ford. And when the full service is launched, again around October, there'll also be e-mail with up to eight addresses per household and home banking from HSBC.

The Open service, unlike the cable companies', is not based on the Internet. The advantage, according to Open is that payments are more secure: credit card numbers go only to an Open server rather than ricocheting around the world on the Net. It also means all Open sites have been specially designed with the TV in mind, though I was surprised to find that pages on the preview service take almost as long to load as Internet pages on my PC.

More interesting than the technical details is the market potential of these new services. Over the years, results of interactive trials in both Europe and the US have been disappointing: pay-per-view television and video-on-demand have proved popular, but once the initial novelty has worn off subscribers have proved unenthusiastic about shopping from their sofas.

Since those trials were conducted, however, e-commerce has burgeoned and more and more retailers and traditional mail order companies are dipping their toes in the e-tailing water. Somewhere between a fifth and a quarter of holiday bookings in the UK originate on Teletext. We are getting more and more used, as a society, to transacting business on screen.

Some in the business concede that it may take a while for the digital TV mass market to come around to the delights of e-mail and e- commerce.

What's more, the domestic television set suffers as a medium for data transfer and transactional services (compared with the PC) due to the fact that other members of the family may be demanding it to watch Brookside or Nickelodeon.

Nor do most of us habitually associate the TV with spending money or the exercise of thought: rather, we expect simply to relax and be entertained when sitting in front of it.

But interactive TVs are simpler than PCs, and a good deal cheaper (indeed, the hardware is free). People who wouldn't dream of buying a PC, or of using it to go shopping if they did, may lose their technofear if the services are available on their friendly TV set. There is a huge potential business here.

If the wired society is ever to become a reality, it may well be interactive digital TV that makes it happen.

Nick Higham is media correspondent for BBC News ends

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