'Scribbled' note is key to Mandelson loan scandal

It is being billed as the next New Labour whodunnit. First there was the mystery of the "one and only" Mo Mowlam. Did they knife her or didn't they? Then came Tony Blair and Gordon Brown - friends or foes? Now the most powerful people in the country are bracing themselves for their next political thriller - the case of the borrowed notepaper.

It is being billed as the next New Labour whodunnit. First there was the mystery of the "one and only" Mo Mowlam. Did they knife her or didn't they? Then came Tony Blair and Gordon Brown - friends or foes? Now the most powerful people in the country are bracing themselves for their next political thriller - the case of the borrowed notepaper.

Coming soon to a bookshop near you (and before that a newspaper or two) is the latest in an embarrassing string of books, the memoirs of controversial millionaire Geoffrey Robinson.

The former Paymaster General's book, which his ex-bosses were hoping he would not write, is the subject of much speculation in the Labour Party. Some say there is an attempt to "smear" Tony Blair, with claims that the book will suggest he knew about Mr Robinson's £370,000 home loan to Peter Mandelson.

Alastair Campbell, the Prime Minister's press secretary, and Mr Mandelson have vehemently denied that Mr Mandelson wrote to Mr Robinson about the loan on headed notepaper from the office of the Leader of the Opposition.

The Independent on Sunday has learned Mr Mandelson did write to him on official notepaper. He has assured Downing Street it was no more than a "scribbled note" and did not concern the loan. Mr Mandelson, Trade Secretary when news of the loan plunged him albeit temporarily into the political wilderness, has told the Prime Minister's office there was "not a correspondence" with Mr Robinson on official notepaper. Although he recalls using official notepaper because it was "to hand", the heading was struck out.

Friends of Mr Mandelson said he "often" used Leader of the Opposition notepaper in 1996 and 1997. "He was in and out of the office a lot at that time." And, they said he was not the only one raiding the boss's stationery cupboard.

Claims surrounding the book were rife last week at Labour's Brighton conference. Supporters of Gordon Brown, the Chancellor, who had a long-running feud with Mr Mandelson, were in the frame. Mr Mandelson has told friends: "This is an operation to smear the Prime Minister, the Government and the party and to get revenge on me."

But the Chancellor's allies last night defended him, saying: "Gordon asked Geoffrey not to write the book. All it can do is damage the Government."

Mr Mandelson has also been warned to expect a claim that he broke off a conversation with Mr Robinson about the loan to take a call from Mr Blair. Mr Mandelson has rebutted the charge as "a lie", and insisted that he did not discuss the matter with Mr Blair.

Number 10 is concerned that there is a clear implication Mr Blair knew about the loan, which brought down both ministers spectacularly.

Senior sources have responded to the accusations by suggesting that Mr Robinson is "bitter" and seeking "revenge" for being dropped from the Government while Mr Mandelson has been fully restored to Cabinet rank.

"It's an attempt to hype something to get publicity for the book," said an ally of Mr Mandelson.

But the potential damage to Mr Blair would be great if it was alleged he knew about the loan. The Prime Minister insisted in the House of Commons that he did not.

Only one question remains - who'll be left holding the smoking gun when the lights come up this time?