Is Miliband set to desert sinking ship?

David Miliband's chances of becoming foreign minister of Europe increased dramatically yesterday after it emerged that the most senior figure in the EU is privately leading a campaign on behalf of the Foreign Secretary.

The likelihood that Mr Miliband will desert Labour as the party heads towards defeat at the election rose with the disclosure that the President of the European Commission, José Manuel Barroso, is backing him for the post.

While Mr Miliband has publicly insisted he is "not available" and "not a candidate", he is understood to be genuinely interested after senior EU figures at the Brussels summit last week said he would be ideal. Yet his interest in the role means he is prepared to give up the Blairite hope of succeeding Gordon Brown as leader before the election and minimise or even avert electoral catastrophe.

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At the same time, Tony Blair was preparing for likely defeat in his campaign to be president of the EU after the leaders of France and Germany appeared to be lining up an alternative candidate.

The fast-moving developments in Brussels and London showed how the fortunes of the key players in the Blairite saga remain linked. The possibility of Mr Miliband departing for Brussels would have a significant impact on the career of Peter Mandelson. At the very least, he could expect to be given the job of Foreign Secretary. However, he could also parachute himself into Mr Miliband's South Shields seat in the hope of, at some stage, succeeding Mr Brown.

Mr Miliband emerged as the real winner in Brussels. His former boss, Mr Blair – who did not attend the summit – was being written off.

Mr Barroso's role in the appointment of the high representative for foreign policy is crucial because the holder would also be vice-president of the commission – and his deputy. He therefore has a veto over who would get the post. Mr Barroso does not have a direct say over the president of the council role that Mr Blair was hoping for.

While the presidency is more of a figurehead position, the foreign affairs job holds real power in the new-look executive created by the Lisbon Treaty, with the office-holder having more resources and influence over shaping the future of Europe.

But Mr Miliband risks becoming unpopular in Labour ranks if he jumps ship for a comfortable Brussels billet at such a difficult moment for the party. If he took the post he would have to step down as Labour MP for South Shields, triggering a by-election. This prospect was causing interest in Westminster yesterday because it could provide the opportunity for Lord Mandelson to return to the House of Commons and line himself up to be Mr Brown's successor.

While it is a remote possibility that the Secretary of State for Business could become leader, Lord Mandelson happened to be in South Shields last weekend delivering the town's annual lecture.

For him to stand for the constituency – and have any realistic hope of becoming Prime Minister – the Constitutional Reform Bill allowing life peers to resign from the House of Lords would have to become law by the time Mr Miliband left his seat in time for the start of his term on 1 January. The Bill is currently at committee stage in the Commons – meaning there are weeks of procedure remaining.

On Tuesday, the Czech government is expected finally to ratify the Lisbon Treaty, giving the green light to the creation of the new posts. The former prime minister has never formally announced his candidacy, but it is possible he could indicate he is ceding defeat later this week.

It would leave Mr Blair free to carry on amassing a multimillion-pound fortune through his business interests and speaking engagements. However, his expected failure to secure the backing of EU leaders reflected a stark contrast between his ambition and the strength of public opinion against him.

Last month, at a service for Iraq at St Paul's, Mr Blair appeared genuinely shocked to be snubbed by the grieving father of a soldier killed in the immediate build-up to the conflict.

Mr Blair's aides were confident of the former premier's low-key campaign succeeding – yet by the start of the Brussels summit last Thursday it was clear that an informal coalition of the centre-right, centre-left and liberal leaders was set against it.

On Friday, the French President, Nicolas Sarkozy, and Germany's Chancellor, Angela Merkel, dropped heavy hints that their powerful axis would not be mobilised in support of Mr Blair.

President Sarkozy said: "The names of the first wave are not necessarily the winners of the last wave." Chancellor Merkel said that she would prefer a figure from one of the smaller countries in the 27-nation bloc.

Last night, William Hill reported that they had not taken a single bet of £10 or more for Mr Blair to become president since the Prime Minister made a public statement of support for his former rival. The bookmaker, which began offering odds of 4-7 on Mr Blair, now has him at 2-1, although he is still the favourite, according to the betting. Jan Peter Balkenende, the Dutch leader, is at 3-1, Luxembourg PM Jean-Claude Juncker is 7-2. The former Spanish premier, Felipe Gonzalez, is at 10-1.

The Czech courts are expected to clear the opposition to the Lisbon Treaty on Tuesday, and ratification could take place within hours. With the treaty signed across Europe, the Tory leader, David Cameron, will be under pressure to issue a statement on his position on a referendum.

Who profits from Blair's likely Euro humiliation?

Tony Blair

The ex-PM has not yet given up hope of becoming EU president, but it doesn't look good. He can console himself with the prospect of carry on cashing cheques at Blair Inc and keep Cherie in evening gowns. He is said to have earned £15m from commercial activities since leaving No 10 two years ago; he charges up to £100,000 a time on the lecture circuit; and through Tony Blair Associates, foreign governments pay him for advice. There's also the £12m property empire. Aides insist the bulk of his time is spent on charitable work, including his Faith Foundation, his Africa Governance Initiative and as Middle East envoy. It would seem, then, that Europe's loss is a net gain for peace and harmony on earth.

David Miliband

Written off over the banana photo a year ago, the Foreign Secretary is now loved in Europe. Perhaps politicians holding soft fruit are seen as masterly, as opposed to ridiculous, on the Continent. It must be so miserable around the cabinet table at the moment; it would be easy to glide on to the next Eurostar out of St Pancras. Signs that he is flirting with the idea show how bad Labour's prospects are. If he is seriously considering leaving, it means he doesn't think he could be leader before the election, or, even if he did win, he would lead Labour to defeat. But, if he goes, the party may never forgive him. His chances of taking the crown in future would be slim.

Peter Mandelson

Mr Miliband's vacation of his seat may be bad for Labour but it would be perfect for Lord Mandelson, whose former constituency of Hartlepool is just down the road. The Secretary of State for Business is nobody's chump; surely he can see that suddenly things are coming together. A Bill allowing him to resign his peerage could be passed by Christmas. It only takes one minister to decide when it becomes law – and Lord Mandelson has 12 of those in his department. He would be a shoo-in for Foreign Secretary, but the South Shields question makes the prospect of him becoming Prime Minister tantalising indeed. Who would ever have thought it?