Blair places his bet on the Thin Controller

For anyone who thought Tony Blair was going to be cautious in office, the newly presidential style unveiled yesterday and particular the appointment of Peter Mandelson as his personal ministerial emissary is a salutary shock. This is a political high-roller's gambit - double or quits.

The centralising of power over interviews and policy speeches in Downing Street will be regarded as ominous by journalists. But after the PR mayhem of the Major years, and given the carnivorous appetites of the press, it is a sensible defensive measure.

More interesting is Mandelson's appointment as minister without portfolio at the centre of government - a sort of mix between terrier, vice-president and political police chief. Mandelson himself has made the case for such a job: there will be many broken-backed, scribbled-on and thumbed copies of his book The Blair Revolution on the bedside tables of uneasy, ill- sleeping mandarins. In it, Mandelson criticised the looseness of Downing Street and the passivity of the Cabinet Office. Quite right: no government has benefited from the lack of central direction and bickering between the great baronies of Whitehall.

Downing Street is a very British institution, which has grown up haphazardly over time, accumulating officials, committees and ways of working in reaction to crises past. It is, as it were, a common law institution. The switchboard may be superb, as Tristan Garel-Jones wrote on this page yesterday. But the heart of government is still infected by the British love of amateurishly muddling through, of especially valuing the inefficient.

No longer: Mandelson has written job descriptions for No 10 and Downing Street personnel who would tighten a Prime Minister's grip on the machinery of government with a rigour we haven't seen even under Margaret Thatcher. The Cabinet Office shouldn't be simply knocking departmental heads together, he argues: it should be "itself providing policy innovation and actively promoting ideas to the various departments".

Again, he's right in principle: inter-departmental work is increasingly important: helping a young unemployed man might involve Education, Employment, Social Services and the Home Office, as well as the Treasury. Mandelson calls these "wicked issues - persistent and intractable, mainly social, problems, which range across departmental boundaries".

So now he has the job of driving the Blair agenda from the Cabinet Office, just as he described in his book. He is the Thin Controller. Blair once said that his project would have succeeded when the Labour Party had learned to love Peter Mandelson. Now, love him or loathe him, all those cabinet ministers who thought they would be shot of him in power, safely tucked up in their own ministries, will have to think again. Mandelson will have more clout than most round the cabinet table. If he succeeds, he will be mimicking the tight central control over colleagues he exercised for Blair up to and during the campaign.

When Blair said on the steps of Downing Street, "we have been elected as New Labour and we will govern as New Labour" that was partly what he meant. Opposition, instead of being an embarrassment to be quickly forgotten in power, becomes a model for power. Mandelson will be a guardian of the central sense of direction, the discipline, the thoroughness and the attention to detail that marked New Labour in the past months. He seemed delighted. But if he's wise he will be taking it on with a certain wariness and unease.

For if Blair has handed him an important assignment, it is also a dangerous one. It may make Mandelson feared, but it will not make him loved. Tory anger at the "Stalinist" control of New Labour will be echoed by leftist MPs.

That may not matter. But if Mandelson's Cabinet Office is indeed to be the pro-active centre and progress-chaser in government, then it instantly diminishes at least two other rival power-centres. The first is John Prescott's title as Deputy Prime Minister, though he may be so busy with his super- ministry as not to care. The second is the Treasury: Gordon Brown's aides have made it clear in the past that they thought a Labour Treasury would need to have a more active and coordinating role in government.

It is well known that neither Prescott nor Brown are consumed with the ardour of their affection for Mandelson. So at the outset it looks as if Blair may be putting his closest political friend into a job that is almost certain to bring him into a struggle for dominance with old enemies. This is brave, or rash, and maybe both. It is certainly self-confident. Mandelson's authority will depend on Blair's aura. Since Blair is potentially the most powerful politician in the post-war history of this country, able to do almost anything he wants, that's quite an aura.

But it doesn't make the job easy. Mandelson will have to take on big departments which are not only led by big people, but which possess more powerful corporate identities and pride than his own. Much will depend on whether he can win the trust and affection of people who have so far loaned him neither.

If he fails, Blair himself will not immediately suffer. When ministers get into a battle with Mandelson then the only person they can go to to resolve the matter is the Prime Minister. He becomes the popular compromise- broker, working behind and after the more abrasive and aggressive Mandelson. The danger, however, is that defeats for Mandelson would be seen as defeats for Blair.

So will he - can he - succeed? Like so much in politics, it is a test, above all, of personality. He should bear in mind that Michael Heseltine was successful because he kept his mouth shut and was notably generous to colleagues, even when they were struggling. Heseltine didn't gossip over lunch, or brief journalists about who had had screwed up. Once one of life's great self-promoters, he taught himself a deep discretion that won the respect of his natural enemies in the Tory party.

Up to now, Mandelson has been a brilliant briefer and stirrer-upper of media noise, pulling people down and elevating others. He has been a media addict; he announced and described his appointment on television before it was officially confirmed. In his book, he seems to conflate the role of ministerial progress-chaser with what he calls "minister for the Today programme".

Well, Heseltine did a bit of that too. But being a controversial public figure is probably incompatible with being a successful Whitehall overlord. If people suspect their failures or private compromises will become known in the Sunday papers, they will not cooperate. If Mandelson is to succeed he will need to reassure suspicious rivals that he is determined, on principle, to be unhelpful to journalism.

The new administration had a choice between continuing with traditional cabinet government, with its rivalries, different personal agendas and arguments; and trying for a much tighter, semi-presidential, style of government, in which the supremacy of Downing Street over every other arm of the administration is utter and unquestioned.

Looking back at New Labour's campaigning, and the landslide it produced, and reflecting on Blair's admiration for Margaret Thatcher's sense of purpose, I don't think we need waste too much time speculating which of them the new Prime Minister wanted. UnBritish? Maybe so; but given Labour's past failures and the pressures on modern government, it may also be essential.