Mandelson returns to government

1:50am Saturday 4th October 2008

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Peter Mandelson's shock return to the Cabinet has been officially confirmed by Downing Street, shortly after he described his latest comeback as "third time lucky".

Gordon Brown appointed Mr Mandelson Business Secretary in his most radical reshuffle since becoming Prime Minister.

His appointment was the most surprising element of a wider-than-expected shake-up that saw returns for other experienced Labour figures such as Margaret Beckett and Nick Brown.

None of the most senior posts were changed - Chancellor Alistair Darling, Foreign Secretary David Miliband and Home Secretary Jacqui Smith all remaining in their posts.

But John Hutton, who is making way for Mr Mandelson, was named Defence Secretary, with Des Browne leaving the Government altogether.

The transport brief, being vacated by Ruth Kelly who is also stepping down as an MP at the next election to concentrate on family life, goes to Geoff Hoon, previously Chief Whip.

No 10 also announced the creation of a new department, covering energy and climate change, to be headed by Ed Miliband, who moves from the Cabinet Office.

Having given up his parliamentary seat in 2004 to take up the post of Trade Commissioner, Mr Mandelson's return to Government is the latest remarkable twist in the career of a man who was twice forced to quit the Cabinet under a cloud.

It appeared to signal the end of a feud with Mr Brown dating back more than a decade to when Mr Mandelson supported Tony Blair to become Labour leader following the death of John Smith.

Downing Street also confirmed that the present leader of the House of Lords, Baroness Ashton, was the Government's recommendation to Brussels to replace Mr Mandelson as a European commissioner.