statement_timeout doesnt work within plpgsql by design?

pagila=# select version();                          version
-------------------------------------------------------------PostgreSQL 8.2.3 on i386-pc-solaris2.10, compiled by cc
-Xa
(1 row)

pagila=# create or replace function test() returns bool as $$ begin set 
statement_timeout = 3000; perform pg_sleep(4) ; return true; end $$ language 
plpgsql;
CREATE FUNCTION
pagila=# select test();test
------t
(1 row)

pagila=# select test();
ERROR:  canceling statement due to statement timeout
CONTEXT:  SQL statement "SELECT  pg_sleep(4)"
PL/pgSQL function "test" line 1 at perform


is this behavior by design?  if so why would you design it that way? :-) 

-- 
Robert Treat
Build A Brighter LAMP :: Linux Apache {middleware} PostgreSQL