Leading article: Mr Blair should find a useful job for his chum

WHERE NEXT for Peter Mandelson? The view of the Labour back benches is clear, namely that he should not be in government. They have made it plain to Mr Blair that, anxious as he may be to rehabilitate his old friend, Peter needs to do more penance for his error of judgement.

While many are settling old grievances, and others will never forgive the key architect of New Labour, Mr Blair will have to listen to his parliamentary grassroots.

He is entering choppy political waters, as we have seen in recent weeks, and he is going to need their patience and support. Thus, he may have quietly to drop his idea of pushing Mr Mandelson as some kind of "personal ambassador". But this is not to say that he should just let Mr Mandelson hang out to dry. For one thing, Mr Blair might not be in Downing Street were it not for the efforts of the former trade secretary. And for another, Mr Blair and Mr Mandelson are friends. The Prime Minister needs and values his advice, comradeship and support. He should be allowed it.

One does not have to be a fully paid up subscriber to the Fuhrerprinzip to accept that Mr Blair is entitled to choose his own friends and advisers. Hostile party hacks may as well ask him not to listen to Cherie.

But the Prime Minister needs to find Mr Mandelson a useful role for reasons other than sentimentality. Even his worst critics might grant that Mr Mandelson is an intelligent man, who has shown a flair for presentation, campaigning and winning elections. And this is a year of elections, above all. Mr Mandelson would be an ideal choice to design campaigns and reinvigorate a neglected party machine. This would not preclude him from making the occasional thoughtful speech on policy, or the Third Way. And he can also be used to press the vital need for Britain to join the single currency. The ambitious Mr Mandelson might find such a prospect irksome. He long wanted a "proper job", a ministry, and to get away from spin. But he blew it. He must accept that. The party needs his talents. And, after he's spent a decent period of selfless service, Mr Blair will have the ammunition to silence critics; he can then call on Mr Mandelson to return to the Cabinet table. The penance will be worth it, for everyone.