Mandy tipped to rise in reshuffle

IT COULD be the greatest achievement of the Blair administration but it has created a serious problem for the Prime Minister. If peace finally does come to Northern Ireland it leaves Peter Mandelson without a great deal to do - which could pave the way for Mr Blair's most wide- ranging reshuffle since New Labour came to office.

In stark contrast with the last festive season, when the Prime Minister was forced to accept the resignation of his trusted lieutenant - then Secretary of State for Trade and Industry - after his pounds 373,000 home loan from his fellow minister Geoffrey Robinson was revealed, Mr Mandelson is likely to be the chief beneficiary of any rejigging.

Westminster insiders believe the Prime Minister will overhaul his Cabinet in the spring. The reshuffle could also determine the futures of the embattled Deputy Prime Minister, John Prescott, and the Foreign Secretary, Robin Cook. Some senior figures believe it will finally complete the shift from Labour to New Labour in the Cabinet, almost certainly spelling the end for other left-wingers, such as Clare Short.

"Mandelson is the one to watch. The Prime Minister was very swift to invite him back into the fold and now that his powers in Ulster are going to be reduced he will undoubtedly be looking to move him into a key position," one member of the Government said.

Informed sources believe the key to the next reshuffle will be to scrap the individual secretaries of state presiding over the devolved Scotland, Wales and Northern Ireland - and appoint a Minister for the Isles with responsibility at Westminster for all three areas. Some MPs are predicting that this will be Mr Blair's cue to move Mr Mandelson into a more prestigious job.

Mr Prescott is seen as a liability in his huge Department of the Environment, Transport and the Regions but is a crucial link between the Prime Minister and the grass roots of the Labour Party. He will answer the criticism that the department is too big for one man to oversee by announcing that Lord Macdonald of Tradeston, the Minister for Transport, will take over the day-to-day management of the portfolio.

Speculation is now mounting that he will be able to retain his high profile in the party, perhaps in a new role that keeps him in the Cabinet by combining the job of party chairman with his title of Deputy Prime Minister.

Responsibility for policy would be shifted to another minister. The Minister for the Cabinet Office, Mo Mowlam, had been tipped to do a similar job, such as the party chairmanship, during her time in charge of Northern Ireland. Dr Mowlam was reluctant to give up the reins in Ulster and is understood to be disaffected with her new job as the "link woman" between the various government departments.

Yesterday, the popular minister became the focus of speculation that she plans to quit the Cabinet altogether after landing a pounds 350,000 book deal with the publisher HarperCollins. The book is expected to tell the story of Dr Mowlam's rise up the political ranks, her battle against a brain tumour and her time as Secretary of State for Northern Ireland.

TONY BLAIR'S CHRISTMAS PUZZLE

THE CHRISTMAS parlour game at Chequers - a cross between musical chairs and Rubik's cube - could present a tricky series of conundrums for the Prime Minister.

THE PETER PROBLEM

The breakthrough in the Northern Ireland peace process last week was a triumph for Peter Mandelson, even though he had been in the job for just weeks. Setting up the new Executive meant that he lost responsibility for much of the administration while retaining control over law and order and security.

THE PRESCOTT PROBLEM

John Prescott is seen as vulnerable after the furore surrounding the Government's transport policy. He is to give day-to-day responsibility for transport to a member of his ministerial team, Lord Macdonald of Tradeston, this week after a fortnight of criticism from Labour's back benches over his plans to privatise the air traffic control system, his retreat on Railtrack's involvement in London Underground and hints that he may compromise on plans for 1.1 million new homes in the South-east.

THE GORDON PROBLEM

Downing Street, of course, denies that Mr Blair's one-time leadership rival, Gordon Brown, is a problem at all and he is certain to stay on as Chancellor. But the Blair-Brown saga could affect allies of the Chancellor, such as the Minister for Agriculture, Nick Brown, who is currently battling with the continuing French ban on British beef. He could find himself moving offices again, having already been shipped out of the Chief Whip's office after the controversial Gordon Brown biography, which suggested a rift between the Chancellor and the Prime Minister.

THE MO PROBLEM

This problem - denied by No 10 - revolves around the current Minister for the Cabinet Office's apparent dissatisfaction with her new job. Dr Mowlam is known to have loved her post as Secretary of State for Northern Ireland and admitted it had been a wrench to leave, despite her reported problems with the leadership of the Ulster Unionist Party.