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Mandelson to return to government Mandelson to return to government
(about 2 hours later)
Peter Mandelson has been drafted back into government in a surprise move, as Gordon Brown reshuffles his cabinet.Peter Mandelson has been drafted back into government in a surprise move, as Gordon Brown reshuffles his cabinet.
Mr Mandelson, who had two cabinet jobs under Tony Blair, is expected be made Business Secretary with a seat in the House of Lords. He is no longer an MP. Mr Mandelson, who was twice forced to resign from Tony Blair's cabinet, has been made business secretary with a seat in the House of Lords.
Business Secretary John Hutton will replace Des Browne at Defence and Geoff Hoon will replace Ruth Kelly as Transport Secretary. Business Secretary John Hutton replaces Des Browne at defence and Geoff Hoon replaces Ruth Kelly at transport.
A new department for energy and climate change is expected to be created. Labour veteran Margaret Beckett returns to cabinet while Ed Miliband is to head up a new climate and energy department.
Mr Browne is to leave the government, the BBC has learned. He was offered another job but he felt it would be an insult to the armed forces to leave as defence secretary but take another job. Defence Secretary Mr Browne is to leave the government, the BBC has learned. He was offered another job but he felt it would be an insult to the armed forces to leave as defence secretary but take another job.
Mandelson rowMandelson row
Former foreign secretary Margaret Beckett is also tipped to return to the cabinet, possibly in a "cabinet enforcer" role while former cabinet minister Nick Brown is also expected to return as chief whip, to replace Mr Hoon. Former foreign secretary Mrs Beckett, one of the most experienced Labour figures having served as acting leader after John Smith's death and with a career dating back to the 1974-9 Labour government, returns to the government.
There is also expected to be some restructuring of departments. A department for energy and climate change, run by a cabinet-level minister, is expected to be created - taking the energy portfolio from the Department for Business and climate from Defra. CABINET MOVES Peter Mandelson to businessMargaret Beckett to returnGeoff Hoon to transportDes Browne to leaveEd Miliband to climate/energyJohn Hutton to defence class="" href="/1/hi/uk_politics/7648551.stm">Latest: Cabinet reshuffle class="" href="/1/hi/uk_politics/7650195.stm">Profile: Peter Mandelson
She may be given a "cabinet enforcer" role while former cabinet minister Nick Brown is also expected to return as chief whip, to replace Mr Hoon.
In another surprise move, a new department of energy and climate will be created, to be headed by former Cabinet Office minister Ed Miliband.
Northern Ireland Secretary Shaun Woodward and Environment Secretary Hilary Benn are expected to remain in their current posts - as are those in the top jobs, chancellor, home secretary and foreign secretary.
The reshuffle is taking place after the announcement that Ms Kelly is to stand down to spend more time with her family. Trade minister Lord Jones has also said he wants to step down.The reshuffle is taking place after the announcement that Ms Kelly is to stand down to spend more time with her family. Trade minister Lord Jones has also said he wants to step down.
Peter is a formidable politician, he's New Labour to his fingertips Derek DraperFormer Mandelson adviser class="" href="/1/hi/uk_politics/7648551.stm">Latest: Cabinet reshuffle class="" href="/1/hi/uk_politics/7650195.stm">Profile: Peter Mandelson Controversial figure
But sources have told the BBC it is not merely a "tidying up exercise" but an attempt to reconfigure government to tackle the economic crisis. Sources have told the BBC the reshuffle is not merely a "tidying up exercise" but an attempt to reconfigure government to tackle the economic crisis.
This is an extraordinary step backwards into the worst elements of the Blair era, to reinstate possibly the most divisive figure in Labour's recent history John McDonnellLeft wing Labour MP Browne quits cabinetBusiness welcomes Mandelson return
There have been tensions between Mr Brown and Mr Mandelson for years, since the two men fell out when Mr Mandelson backed Tony Blair for the Labour leadership in 1994.There have been tensions between Mr Brown and Mr Mandelson for years, since the two men fell out when Mr Mandelson backed Tony Blair for the Labour leadership in 1994.
But at the height of a row between Mr Mandelson and French President Nicholas Sarkozy over international trade talks this summer, the prime minister backed the trade commissioner, saying he was doing "excellent work".But at the height of a row between Mr Mandelson and French President Nicholas Sarkozy over international trade talks this summer, the prime minister backed the trade commissioner, saying he was doing "excellent work".
The BBC's James Landale said the appointment is a "gamble" as Mr Mandelson is a "mercurial figure". Mr Mandelson's appointment will be seen as a gamble, according to the BBC's James Landale.
But it is part of the prime minister's attempts to reconfigure the government to deal with the economic crisis - and as as EU trade commissioner for the past four years, Mr Mandelson has global experience in trade and finance. Mr Brown will be keen to draw on his global finance experience gained during his four years as EU trade commissioner.
Business ambassador 'A masterstroke'
He has been a controversial figure, resigning twice from cabinet posts - once over a loan from his ministerial colleague Geoffrey Robinson and once over allegations of misconduct over a passport application for the Hinduja brothers. An inquiry later cleared him of wrongdoing over the Hinduja affair. But he has been a controversial figure, resigning twice from cabinet posts - once over a loan from his ministerial colleague Geoffrey Robinson and once over allegations of misconduct over a passport application for the Hinduja brothers. An inquiry later cleared him of wrongdoing over the Hinduja affair.
But Derek Draper, a former advisor to Mr Mandelson, said the fact the former Hartlepool MP, "the most Blairite Labour figure," and Nick Brown - a close ally of the PM - were both being brought in showed "the Labour Party getting its act together". Derek Draper, a former advisor to Mr Mandelson, said the fact the former Hartlepool MP, "the most Blairite Labour figure," and Nick Brown - a close ally of the PM - were both being brought in showed "the Labour Party getting its act together".
Derek Draper: 'It's absolutely fantastic news for the Labour party'Derek Draper: 'It's absolutely fantastic news for the Labour party'
"Peter is a formidable politician, he's New Labour to his fingertips. He's done a good job in that department before [trade and industry] .. and he knows a lot about trade, having been European trade commissioner." Former home secretary David Blunkett told Sky News it was a "masterstroke".
But left wing Labour MP John McDonnell said he was "absolutely gobsmacked": "This is an extraordinary step backwards into the worst elements of the Blair era, to reinstate possibly the most divisive figure in Labour's recent history."
However backbencher Graham Stringer, one of the rebel MPs who had called for a leadership challenge, told the BBC, that the cabinet had "lacked experience" over the past 12 months.
"I think bringing back Margaret Beckett, bringing back Peter Mandelson - not talking about them individually - but it does bring more weight and balance to the cabinet," he said.
Business ambassador
The BBC's Europe editor Mark Mardell says EU Commission president Jose Manuel Barroso has been talking to the prime minister about Mr Mandelson's replacement.The BBC's Europe editor Mark Mardell says EU Commission president Jose Manuel Barroso has been talking to the prime minister about Mr Mandelson's replacement.
The BBC has learned that Sir John Bond, the chairman of Vodafone, may become a "business ambassador" for the government. In a separate development, Sir John Bond, the chairman of Vodafone, is to become a "business ambassador" for the government.
Changes are not expected in the top cabinet jobs, chancellor, foreign secretary and home secretary but more are likely among lower level ministers.
Most cabinet members have been briefed on the changes, which are expected to affect lower level ministers the most. Mr Brown has now left Downing Street on a visit to Luton.
Among those who have been tipped for promotion are immigration minister Liam Byrne, housing minister Caroline Flint, Home Office minister Tony McNulty and backbencher Jon Cruddas, who did well in last year's deputy leadership race.
The creation of a new National Economic Committee is also expected to be confirmed, to bring together ministers across government to deal with the economic crisis.
HAVE YOUR SAYBrown has lost his marbles if he thinks that bringing Mandelson back will give him credibility Tim, WirralSend us your commentsHAVE YOUR SAYBrown has lost his marbles if he thinks that bringing Mandelson back will give him credibility Tim, WirralSend us your comments
The news that Ms Kelly was to step down as transport secretary to spend more time with her four children came as a surprise during Labour's conference week, just hours after Mr Brown had given his keynote speech. Mr Brown's press secretary and special adviser for media affairs, Damian McBride, is to to take a "more back room role" and will no longer speak to the media on the government's behalf. Government officials stress it was his decision.
There had been suggestions she was unhappy with Mr Brown's leadership but she has described him as a "towering figure" and said it was a personal decision. For the Liberal Democrats, Danny Alexander said the prime minister was "deluded" if he thought appointing Mr Mandelson would persuade voters he had what it takes to govern the country.
Lord Jones - the former CBI chief brought into Gordon Brown's first cabinet as one of the so-called "goats" - a member of the "government of all talents" - has said he only ever intended to do the job for a limited time and was not a judgement on Mr Brown. "Resurrecting ex-ministers from the political graveyard is not going to breathe new life into Gordon Brown's zombie government," he said.
He had been involved in some controversy during his time in the job, for example expressing concerns about plans to tax "non-domiciled" foreigners in Britain.