Mandelson's return could cost Euro poll, PM warned

Tony Blair defied furious Labour backbench MPs yesterday to appoint his friend Peter Mandelson as Britain's European commissioner. But the Prime Minister was warned that it could cost him the referendum on the European Union constitution.

Tony Blair defied furious Labour backbench MPs yesterday to appoint his friend Peter Mandelson as Britain's European commissioner. But the Prime Minister was warned that it could cost him the referendum on the European Union constitution.

Labour MPs said there would be a bigger "no" vote against the EU constitution as a result of Mr Blair's appointment of Mr Mandelson to the £143,000-a-year post in Brussels, which comes with a £24,000 housing and chauffeur allowance, a generous pension and an entertaining budget of £7,000-a-year.

A senior minister said that Mr Blair was prepared to "take the hit" of the personal damage over accusations of "cronyism" and the possible loss of the safe Labour seat in Hartlepool in a subsequent by-election, which could be contested by Robert Kilroy-Silk for the United Kingdom Independence Party. "We will win it back at the general election," said the minister. Labour critics said he would do lasting damage to the Government's chances of winning a "yes" vote in the referendum. Giving Mr Mandelson the role as Britain's sole EU commissioner, replacing Neil Kinnock and Chris Patten, will thrust him back into the high-profile front line of politics. But it is a high risk for Mr Mandelson, who will attract all the Eurosceptic criticism that was directed at his predecessors.

Mr Kinnock said that Mr Mandelson was a highly capable politician who would support European and British interests in Brussels. Simon Buckby, the former campaign director of Britain in Europe, said: "Peter has got to understand this is his last chance."

John Cryer, the Labour MP for Hornchurch and a leading member of Labour's "no" campaign, said: "This is not going to help their campaign for the constitution - the embodiment of New Labour leading the 'yes' campaign is going to pile up the votes for those who are going to oppose the treaty."

Kate Hoey, a former sports minister, said: "This is good news for the "no" campaign against the constitution. Peter represents the things people don't like about Europe - he reminds people why they plan to vote no."

Ian Davidson, MP for Glasgow Pollok and leader of the Labour Against a Superstate campaign, said: "Peter Mandelson represents those who support moves towards a European superstate - that's something Labour supporters don't want."

His appointment was confirmed after a week of agonising by Mr Mandelson and Mr Blair over his departure from Westminster politics. Mr Mandelson pleaded for a cabinet post. Mr Blair wanted to appoint him but was persuaded in private meetings last week by senior cabinet colleagues that it would cause a revolt in the party.

Mr Mandelson was being tipped last night for the Single Market portfolio.