Mandelson could get European post in next Cabinet reshuffle

Tony Blair will start to reshuffle his Cabinet today and is expected to appoint his close ally Peter Mandelson to a post as a European commissioner.

The Prime Minister hopes to build a stronger team to take Labour into the general election that he has pencilled in for May next year. Ian McCartney, the Labour chairman and a member of the Cabinet, is likely to lose his job following criticism of the party machine.

Mr Mandelson, the MP for Hartlepool, is expected to be sent to Brussels in what would be his second political comeback. He has twice resigned from the Cabinet, although he was later cleared by an inquiry of any wrongdoing in his links with the Indian businessmen the Hinduja brothers, which provoked his second resignation.

His appointment as a commissioner would be controversial and there was speculation last night that some ministers, including the Foreign Secretary, Jack Straw, were mounting a last-minute attempt to persuade Mr Blair to drop the idea.

Opponents believe Mr Mandelson, a pro-European, would hinder the prospects of a "yes" vote in a referendum on the European Union constitution. But supporters say he would be a powerful communicator in the referendum campaign and believe Mr Blair will "bite the bullet" by giving his close adviser the "big job" he wants.

The appointment would mean a by-election in Hartlepool, where Mr Mandelson had a majority of 14,571 over the Tories at the last general election. Labour officials have been put on standby for a snap contest.

Mr Blair will see ministers affected by his changes after holding his monthly news conference at Downing Street at lunchtime today. He will face journalists' questions for the first time on the Butler report. His new team will be announced today or tomorrow.

Other ministers likely to leave their posts include Andrew Smith, the Work and Pensions Secretary, and Baroness Amos, the Leader of the Lords. Among those tipped for promotion are Alan Johnson, the Higher Education minister; David Miliband, the Schools Standards minister; Ruth Kelly, a Treasury minister, and Hazel Blears, a Home Office minister.

Mr Blair marked his 10th anniversary as Labour leader yesterday with a speech which anticipated a third general election victory but acknowledged that the party would need a different message for the voters.

Speaking at a meeting held by the Progress modernisers' group to launch its new journal, the Prime Minister said: "In 1997 it was enough for us simply to say this is a country that's under-invested in. At the next election people will want to say: 'That money having gone in, tell me, as a user of these services, am I really going to benefit from this investment?'"