He said, “The government is writing letters.”

The correct answer is A. He said that the government is writing letters.

The sentence “He said, ‘The government is writing letters'” is in the present tense. This means that the speaker is saying that the government is currently writing letters. Option B is incorrect because the past tense is used. Option C is incorrect because the future tense is used. Option D is incorrect because the past participle “written” is used.

The sentence “He said that the government is writing letters” can be paraphrased as “The speaker said that the government is currently writing letters.”