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.

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 £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 regions - Scotland, Wales and Northern Ireland - and substitute them with a Minister for the Isles, who would have responsibility at Westminster over 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 traditional grass roots of the Labour Party. Mr Prescott's conference speeches are always greeted with a warm reception by delegates - a sign of his enduring popularity in the regions.

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.

But responsibility for policy would be shifted to another minister. The Minister for the Cabinet Office, Mo Mowlam, had previously 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 £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.