Getting passwd: System error when adding user

[Kjell L.]

Binary package hint: adduser

I cannot set a password for a newly created user using adduser.

Step to produce is to type adduser test. Then I get:

Adding user `test' ...
Adding new group `test' (1001) ...
Adding new user `test' (1001) with group `test' ...
Creating home directory `/home/test' ...
Copying files from `/etc/skel' ...
passwd: System error
passwd: password unchanged
Try again? [y/N]

ProblemType: Bug
DistroRelease: Ubuntu 10.04
Package: adduser 3.112ubuntu1
ProcVersionSignature: Ubuntu 2.6.32-19.28-generic 2.6.32.10+drm33.1
Uname: Linux 2.6.32-19-generic x86_64
Architecture: amd64
Date: Sat Apr 3 01:31:42 2010
InstallationMedia: Ubuntu 9.10 "Karmic Koala" - Release amd64 (20091027)
PackageArchitecture: all
ProcEnviron:
 LANG=en_GB.utf8
 SHELL=/bin/bash
SourcePackage: adduser