nano doesn't work in shell launched from D-I menu

[peter green <plugwash@p10link.net>]

I wanted to make some small tweaks to the setup before rebooting at the 
end of the install so I could run the system using qemu in nographic 
mode after installing it using the graphical mode.

So I backed out to the menu and selected the option to launch a shell, 
chrooted into the target and tried to use nano. I was surprised to find 
this failed with the error message "Error opening terminal: bterm".

Is this a known issue? or should I file a bug report (and if the latter 
against what?)