PL/pgSQL problem with variables

I want to write a function that creates a new column for every value
found in the table but something seems to go wrong with the variable:

CREATE FUNCTION transp() RETURNS int4 AS '
DECLARE
col RECORD;
cname varchar;
BEGIN
CREATE TABLE tmp_trans (label) AS
SELECT label FROM view_inc_age_1;
FOR col IN SELECT DISTINCT age_code FROM view_inc_age_1
LOOP
cname := col.age_code;
ALTER TABLE tmp_trans ADD COLUMN cname int4;
END LOOP;
RETURN 0;
END;
' LANGUAGE 'plpgsql';

persons=# SELECT transp();
ERROR: parser: parse error at or near "$1"

The problem occurs in the line containing "ALTER TABLE". Does anybody
know what is going wrong?

Hans