ecpg 'set' failure using host vars

Hi,

I've been using the following set statement just fine under versions
prior to 8.3.3:
  exec sql char *sm;  ...  sm = "myschema";    // This may not always be constant  ...  exec sql set search_path to
:sm;

However, a recent upgrade from 8.2.7 to 8.3.3 (on FC9) caused the
'set' statement to suddenly start throwing the dreaded error:

ERROR: syntax error at or near "$1" in line 13256

Running in debug output mode we are seeing the following:

[22245]: ecpg_execute line 13256: QUERY: set search_path to  $1  with 1 parameter on connection ecpgconn
[22245]: ecpg_execute line 13256: using PQexecParams
[22245]: free_params line 13256: parameter 1 = myschema
[22245]: ecpg_check_PQresult line 13256: Error: ERROR:  syntax error at or near "$1"
LINE 1: set search_path to  $1                            ^

When the schema is replaced by a literal it works just fine, thusly:   exec sql set search_path to myschema;

Did we miss something in the porting between versions?

Any help would be greatly appreciated.

Bosco.