Absolved by his friends, it's time at last to put this 'muddle' behind him

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Indy Politics

Next Wednesday, Peter Mandelson and Michael Portillo will be the joint guests of honour at a Centre for European Reform reception in the Belgravia home of Lode Willems, the Belgian Ambassador. This is smart casting, because the two men have quite a lot in common, besides a capacity to intrigue the kind of sophisticated audience that will throng to the event.

Each is the most exotic senior figure to have emerged from his party in the past 20 years. Each has found himself, while still under 50, on the back benches after holding high Cabinet office. And each has a grudging respect for the other. So much so that when Mr Portillo, during his exile from parliament, chose to interview Mr Mandelson, then a minister, for a Channel 4 television documentary, Mr Mandelson remarked to him – correctly – that they were both "high-wire acts", adding that they were both "risk takers" who put their heads "above the parapet".

But there is an obvious difference. While his party rejected him as leader, Mr Portillo's decision to leave front line politics was entirely voluntary. Mr Mandelson's was anything but.

He not only did not want to go, he has always strongly believed that he should not have done. For better or worse, he has refused to let the subject go. The importance – and no doubt the purpose – of the Downing Street reaction to Sir Anthony Hammond's second report is that it affords him the opportunity to do just that.

To say that he has laboured under a consuming sense of grievance since he fell is not to say that he has been miserable. His private life is said to be happy, all the more so since his partner, Reinaldo da Silva, returned from a four-month language course in South Korea just before Christmas.

He has continued to speak to his old friend Tony Blair, rarely, if ever, speaking on policy without consulting Downing Street. When, for example, Mr Mandelson suggested that some of the attacks on the government's handling of public services were designed to reduce its chances of holding a euro referendum, it looked as if he had fallen out of the loop. Instead it emerged that this was the view in Downing Street.

And he has been busy, not only writing (his GQ column pays around £12,000 a year) but also speaking on the blue chip international conference circuit about everything from globalism to the Middle East. He has a part-time consultancy with – and a shareholding in – the blue chip and highly successful advertising agency Clemmow Hornby Inge in which Jeremy Hornby, the brother-in-law of his friend Robert Harris, is a partner. He is on the international advisory board of Independent News & Media, of which The Independent is a part.

Mr Mandelson also holds unpaid posts ranging from president of the Central School of Speech and Drama to chairing the Blairite (and international) Policy Network, to membership of the Teesside Urban Regeneration Board. He has campaigned hard for the families of the victims of the Omagh bombing, giving to their funds the £10,000 he earned from The Sunday Times for his first article after resigning in January last year.

It is a measure of the support that he still enjoys in his local party that Leo Gillan, a local businessman from a strongly Labour family and one of his closest friends in Hartlepool, has now become the town's mayoral candidate.

Having shared, when he was in government, a degree of computer illiteracy surprisingly prevalent in the upper echelons of New Labour, he is now rarely away from his Compaq laptop, having applied his lifelong aptitude for letter writing to the prolific use of email. One day, he will no doubt use it to write his memoirs.

But not yet. So what is his future? Could he come ever come back to the Cabinet? The fact that the question can be asked is something of a turnaround since the twice-disgraced Mr Mandelson stood, windswept and coatless, outside No 10 Downing Street in January 2001 and announced his resignation. But the balance of probability remains heavily against.

The extent to which he would be the focus of adverse publicity – especially but not exclusively in advance of a euro referendum – counts against it. (Nor is it helped by the tin ear for such publicity that Mr Mandelson has displayed on occasions since his resignation – the Hartlepool election night "I'm a fighter not a quitter" speech and the decision to stay in the home of the ex-Tory defectorShaun Woodward being two examples of that.)

It might be even more difficult for Mr Blair to bring him back than for a successor to do so. For, if Mr Mandelson fell again, Mr Blair would probably have to resign with him, having brought him back twice. And it is hard to imagine Gordon Brown tolerating his return.

Without explicitly pledging to fight the next general election, Mr Mandelson has told his local party that he will remain Hartlepool's MP for the parliament. That appears to preclude a job as Britain's European commissioner, which would come up in 2004.

More likely, perhaps, might be some form of UN post. If the US diplomat Richard Holbrooke was, for example, to stand down as chairman of the UN's global council on Aids – Mr Mandelson has become increasingly preoccupied with the ravages of the disease in sub-Saharan Africa – he would probably jump at the job.

But the fact is that for the first time in his life Mr Mandelson does not have a clear, driving personal project. Until now "clearing his name" was it.

The crisis that led to Mr Mandelson's resignation caused problems for his friendship with Alastair Campbell. These are now said to be resolved; they had a warm meeting only this week at a party for Peter Stothard, the outgoing editor of The Times.

The "muddle" – the word was in the No 10 statement yesterday – of that week in January last year was compounded by the fact that Mr Campbell greatly "overbriefed" in two different directions, first by saying that Mr Mandelson had not been involved at all in the Hinduja affair phone-call and then, a day later, that Mr Mandelson had looked through his records and discovered that he had made the call.

Before Christmas, however, the two men met for lunch. It was, by all accounts, a strange, if friendly, occasion. They did not discuss the role played by Mr Campbell – which the latter is said to have acknowledged to a third party. Mr Campbell is reported to have come away feeling that Mr Mandelson had not yet accepted what had happened. Which indeed he had not – until yesterday.

Because that is the psychological meaning of yesterday's carefully choreographed and distinctively New Labour events: Mr Mandelson can – and should – now put his second resignation behind him and move on.