Mandelson's fall: End of a useful, but fatal, friendship

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The Independent Online
WHEN Peter Mandelson met Geoffrey Robinson in the early 1980s it was not a meeting of equals. Mandelson was a young Labour researcher, working for the MP Albert Booth; Robinson was already a junior whip.

The MP for Coventry North West became something of a mentor to the bright young thing, showing him around the Commons and introducing him to interesting politicians. The two wrote a Labour Party paper on transport policy together, Robinson using his experience at Jaguar cars, Mandelson calling on his time at the Trades Union Congress. They became friends, often having dinner together or drinks in one of the Commons bars.

Then Mandelson left politics for the glamorous world of television and when he returned to run the Labour Party's campaigns, the situation was changed. Robinson, who had taken several years out of frontline politics to make even more millions in business, was out of the loop. Mandelson was at the heart of the inner circle, first with Neil Kinnock and then, after a short period in the wilderness under the late John Smith, with Tony Blair.

Robinson quickly realised that it would be both useful and interesting to rekindle his friendship with Labour's spin- doctor-in-chief, by now also the MP for Hartlepool. In the autumn of 1996 he invited Mandelson to dinner at his penthouse, rented from the Grosvenor House hotel, overlooking Hyde Park. Over champagne in the thickly carpeted apartment, they discussed the strategy for the general election and how to win over the business community.

By now Robinson had built close links with Gordon Brown and acted as a go-between for the future Chancellor, urging Mandelson to help bury the hatchet which was still all too visible following their falling-out over the leadership race that saw Tony Blair take charge.

Then, just as the evening was drawing to a close, the conversation turned to more delicate matters. The MP for Hartlepool mentioned that he was having difficulty raising the money to buy a London house, and the MP for Coventry North West said he would be "happy to help". As they discussed the details, it became clear that Mandelson would not be content with a two-bedroom flat in Hammersmith; he wanted a pounds 475,000 house in Notting Hill and Robinson agreed to lend him pounds 373,000 at what was a very favourable rate.

Mandelson accepted the loan. At that point there had been no revelations about an offshore trust, press allegations about business irregularities or news of a glamorous sugar mummy called Madame Bourgeois; these were to emerge over the coming months.

The loan inevitably complicated matters for Mandelson. When Labour got into power, he was one of the key advisers telling the new Prime Minister who to appoint to the Government. Robinson's business background and close connections with Gordon Brown made him the perfect Paymaster-General - but if anybody had then known about the loan, questions might have been asked about his appointment.

As Labour settled into government, everybody assumed that Robinson was primarily a Brown man. His regular football-watching evenings at the Grosvenor House flat with the other three members of the "Gang of Four" - the Chancellor and his advisers Charlie Whelan and Ed Balls - confirmed this impression. In fact, Robinson did not see himself as loyal to just one camp. He told friends that he saw himself as the link-man between Tony Blair and Gordon Brown, drawing a diagram of himself at the centre of a triangle.

However, the Paymaster-General soon became caught up in the crossfire between Mandelson's and Brown's offices. The focus for this frustration was the launch of a DTI inquiry into Robinson's business affairs, confirmed by the new Secretary of State for Trade and Industry in a letter to the shadow chief secretary to the Treasury, David Heathcoat-Amory. Relations between Mandelson and Robinson began to sour. Some Treasury officials became convinced that this letter, which was leaked to the press, was part of a Mandelson plot to stitch up Robinson. They let it be known that the Paymaster-General and the Chancellor were not best pleased with him.

Mandelson's allies believe the details of the loan were deliberately leaked by the Treasury as a revenge strike - that Robinson was determined not to go down unless the flourishing career of the MP for Hartlepool was cut short too. The Brown camp says the Trade Secretary put out the story himself, to take the fire out of a hostile biography by Paul Routledge of the Mirror.

Whatever the truth, the result was disastrous for both. One government adviser said on Wednesday afternoon: "It was Mad - mutually assured destruction."