Mandelson set for new party role

TONY BLAIR is being urged to give Peter Mandelson a key behind- the-scenes role at Labour's Millbank headquarters later this month as right-hand man to a new party campaigns chief.

Labour MPs want Mr Blair to form a "dream team" under which the arch- moderniser Mr Mandelson would work closely with Ian McCartney, an Industry minister who is on the party's left wing. Mr McCartney is strongly tipped to become the party's campaigns co-ordinator, a post currently held by Margaret Beckett, the Commons leader. He could also take over the party campaigning work of John Prescott, the Deputy Prime Minister.

Mr Blair is keen to create a full-time party campaigns chief, who is not bogged down with a ministerial workload, for the period up to the general election. After Labour's defeat in last month's European elections, he is anxious to exploit Mr Mandelson's skills as a campaign strategist. Mr Blair's aides believe there is no reason why Mr Mandelson should not be brought back from the wilderness, even though he was rebuked this week by the Commons Standards and Privileges Committee for not registering the pounds 373,000 loan from Geoffrey Robinson which forced his resignation from the Cabinet last December.

Giving him a non-ministerial party position in the Cabinet reshuffle later this month would be seen as a way for Mr Mandelson to work his passage back to a Cabinet post in a year's time. "Mandelson and McCartney are chalk and cheese, but they would be a dream team," said one party official. "They surprised people by working together well when Mandelson was McCartney's boss at the DTI."

Phil Woolas, MP for Oldham East and Saddleworth and a member of Mr Prescott's "leadership campaign team", said:"There is a lot of support for this on the backbenches. McCartney and Mandelson combine Old and New Labour, they would represent John Prescott and Tony Blair and allow us to appeal both to our traditional heartlands and Middle England." Mr McCartney is in charge of Labour's campaign for the by-election at Eddisbury, Cheshire, on 22 July,caused by the resignation of Conservative MP Sir Alastair Goodlad.

The dimunitive Mr McCartney - dubbed "Big Mac" after his campaign against low wages paid by McDonalds - is a close ally of Mr Prescott and Gordon Brown, the Chancellor. They are believed to want him to be promoted to the Cabinet in this month's reshuffle. Mr Prescott was furious when Mr McCartney failed to become Trade and Industry Secretary when Mr Mandelson resigned. Instead, Mr Blair appointed Stephen Byers, a moderniser.

The Prime Minister is thought to favour recruiting an Old Labour figure like Mr McCartney to build bridges between the Government and the party's grassroots.