BT has fought off a legal challenge from the UK government over its giant pensions bill – confirming that taxpayers could be on the hook for billions of pounds in the event the telecoms giant ever goes bust.

The dispute between BT and the government, which has been ongoing since 2010, concerns a so-called "Crown Guarantee" offered to BT upon privatisation in 1984, under which the taxpayer would pick up its pensions bill if the company ever went into insolvency.