THE MANDARIN'S TALE

It was not Sir Richard Wilson but Tony Blair himself who decided that Peter Mandelson

had to go, says Robert Peston IF there is any reason for sympathy with Peter Mandelson, it might be this. The Hammond report on his dealings with the billionaire Hinduja brothers may next week salvage something of his political reputation. But he will lose something equally cherished. The report will demolish his convenient self-delusion that Whitehall ganged up with his rivals to undermine him in his hour of greatest vulnerability. Far better to be left shouting, like the Carry On star, 'Infamy infamy, they've all got it in for me', than to learn the desperate truth: that the man almost solely responsible for his sacking was his closest political confidant, his brother in arms against the Old Labour enemy, his friend and hero Tony Blair.

In a trivial sense prime ministers are always responsible for hiring and firing ministers. But Mandelson has been searching for a more complex explanation of why he went than that he simply alienated his patron. He appears to have persuaded himself that the Prime Minister was under great pressure from Sir Richard Wilson, Cabinet secretary and head of the home civil service, to sack him.

Authoritative accounts of how Mandelson saw the hours leading up to the departure almost always cite a supposedly tendentious dossier compiled by him. The senior mandarin is depicted, along with Derry Irvine, the Lord Chancellor, as a cold-hearted hanging judge, who concluded that Mandelson had committed a capital crime. In this version, Blair could be seen as almost blameless: he was simply the rubber-stamper.

Well, Wilson, I am told, is not at all happy about this portrayal of himself as the man who made blood-brothers turn on each other. 'Richard is extremely pissed off at the implication that he recommended that Mandelson should resign,' said a close friend of his. 'He feels Mandelson has cast the first stone, and therefore wants to set the record straight. The fact is he did not recommend that Mandelson had to go. The reverse is true. What he told the Prime Minister is that the evidence against Mandelson was not so grave as to require his resignation.'

Wilson has taken great pains to make

this clear in the evidence he has submitted to Sir Anthony Hammond, the ex-Home Office lawyer and former Treasury solicitor who is heading the inquiry into the Hinduja affair. And, according to a senior Whitehall official, Wilson is confident that Hammond — who is known to his civil-service chums as 'Wally' — will accept his account.

Now to get on to the detail of all this: prime ministers routinely ask the advice of their Cabinet secretaries when their ministers are accused of impropriety. Wilson's predecessor, Lord Butler, seemed to spend almost all his working hours deciding whether this or that minister had disgraced his office.

Inevitably, therefore, Wilson was in the thick of things after 21 January when the Observer reported that the Northern Ireland Secretary had become involved in attempts by the Indian billionaire, Shetland Hinduja, to obtain a British passport.

A crucial question was whether there was any evidence linking Mandelson's help for Mr Hinduja to a £1 million contribution by the billionaire and his brother to the Faith Zone of the Millennium Dome. If there was any proof that Mandelson was doing him a favour in order to obtain financial advantage for the Greenwich bubble, Wilson would have unhesitatingly said that he had to go.

But on the evening of 23 January Wilson reviewed a file compiled on all this by the Department of Culture and concluded that Mandelson was in the clear. There was no evidence of impropriety by Mandelson in the way the donation was obtained. Wilson and Robin Young, permanent secretary at DCMS, signed an official minute to that effect. And, as it happens, I understand Wally has come to the same conclusion.

So we are led inexorably back to the view

that there is no great mystery about Mandelson's departure. The relevant facts were on display at the moment he went. It was all to do with the statement he gave to the Observer to the effect that contact with the Home Office over the Hinduja passport application was made by his private office. This implied that Mandelson had not personally made the inquiry. Yet Jack Straw had informed Mandelson a few days before that the Home Office had a minute showing that he had telephoned Mike O'Brien, the junior Home Office minister, about the passport.

There has been much huffing and puffing among media commentators and politicians about whether this shows Mandelson to be a liar. He insists he did not lie, that he had no recollection of a call to O'Brien, that his private office was later able to back up his version of events, and that there has been some terrible miscarriage of justice.

Funnily enough, Wilson — as a civil servant trained to take a quasi-judicial view of events like these — agreed that there was no proof that Mandelson had lied. Wilson's role begins and ends with an assessment of whether a minister has contravened the official ministerial code of conduct or has broken the law. He was unable to demonstrate that Mandelson had infringed on either of these counts.

The hiring and firing of ministers is not a judicial process. It is a political act by the Prime Minister, who is all-powerful in this respect. In a funny sort of way, it is irrelevant whether Mandelson lied or not. The point is that his confusion over what happened lost him the trust of the Prime Minister. The fact that this happened within a few months of the general election is hardly a coincidence.

It is possible to feel sympathy for Mandelson; to recognise that he has been severely punished for his mistake. But to characterise it as a tragic mistrial is absurd. It was the fact that Mandelson ignored what Jack Straw told him about his conversation with Mike O'Brien that did for him. In the end, it did not really matter whether Mandelson did this on purpose or by accident. He got the government into trouble over it, so — in Blair's eyes — he had to go.

Nor did Blair make any great secret of this. His Downing Street media adviser, Bill Bush, was briefing this line to ministers who were appearing on radio and television in the aftermath of the resignation.

I have said that there was no big mystery about why Mandelson went, but there is a nagging question. It is still a bit puzzling that Blair was not prepared to tolerate the adverse publicity which Mandelson had brought on the government. Earlier in the government's life, Blair could have lived with the embarrassment because Mandelson was simply too important to him. The untold story is how and why Mandelson suddenly became dispensable.

Robert Peston is editorial director of QUEST; website: www.CSQuest.com; email: Peston@Peston.com.