BRITAIN: The impression of Blair-Brown consensus on the euro has been shattered, reports Frank Millar.
Peter Mandelson said it; now you know it's true. Tony Blair's cabinet is split over British membership of the euro, and the Prime Minister is at risk of finding himself outmanoeuvred by his "obsessive" Chancellor, Gordon Brown.
Having identified Mr Mandelson as the source, some readers may wonder at the certainty that this is indeed the unvarnished truth. The former Northern Ireland secretary endures in many minds as an architect of the New Labour project, with all the reliance on spin and presentation which served the party so well in opposition and which has consistently helped tarnish its reputation in government.
When Clare Short famously identified the practitioners of these arts as "people who live in the dark" there is no doubt Mr Mandelson was one of those she had in mind. For a time at least Mr Mandelson even enjoyed his reputation as New Labour's Prince of Darkness.
However, he found it an impediment when he assumed ministerial office, as it is an irritant now that he has spoken out on an issue about which he feels passionately.
For no serious commentator would dispute that Mr Mandelson is in turn an extremely serious political operator. Certainly his friends and admirers are convinced he knew exactly what he was doing at that now-famous "off-the-record" lunch with women journalists when he blew apart the facade of unity which Mr Blair and Mr Brown had constructed just days before.
That the Prime Minister and Chancellor found it necessary to insist they were at one on the euro should have made plain to everyone they were anything but.
When it was announced a week ago on Thursday that Mr Brown would deliver his presumed not-yet verdict on June 9th, Downing Street signalled a victory for Mr Blair in securing full cabinet involvement in shaping the terms in which that decision would be framed.
Moreover, it was indicated that Mr Blair had successfully opened up a collective sense of cabinet ownership of the discussion and decision-making process from now on. The power of decision, in other words, was finally being wrested from the Chancellor.
Not for long. With Mr Brown presumably infuriated by the next day's headlines, spokesmen for Mr Blair and the Chancellor briefed political editors last Friday night to the effect that neither man held a dogmatic view on whether a referendum on euro membership should or could be held before the next general election.
Since Mr Blair emphatically did want to keep alive the option of a referendum during the present parliament, this suggested something of a prime ministerial retreat. To remove any lingering doubt, Mr Brown then appeared on television on Sunday to confirm that the cabinet's decision would "absolutely" be based on his and the Treasury's assessment of the famous five economic tests.
At the same time sources close to Mr Brown were leaving Westminster journalists in no doubt that the economic assessment was a mighty serious work likely to stand the test of a considerable time to come.
This was the backdrop, then, to Mr Mandelson's intervention. And, whatever the notion that this was a private lunch, the twice-resigned former minister must have known he had fashioned an explosive device destined for next day's front pages.
Nothing less than a cornerstone of the New Labour project would collapse if Mr Blair failed to call a euro referendum in this parliament, declared Mr Mandelson, confirming in the process that this was the issue at the heart of the ongoing Blair-Brown struggle.
Explaining that Mr Blair was not such a 24-hour politician, his sometimes closest confidant continued: "If he was as obsessed with politics, he would not have let himself be outmanoeuvred by the Chancellor in the way that he potentially has."
Failure to call a referendum would embolden the Conservatives and Britain's Eurosceptic press while the Blair government lost influence and ability to shape vital decisions in Europe.
"Is that what the Labour government wants to see?" demanded Mr Mandelson, before answering his own question: "I think not. It would be a great setback for the country, it would do damage to the government and the New Labour project, and it would inevitably therefore [DO DAMAGE]to the Prime Minister as well."
Political and press reaction was swift and fairly predictable. This was the voice of the dispossessed, a despairing cry from a one-time giant no longer inside the loop, a spin too far from a fellow unable to help himself.
Clare Short detected the result of Mr Mandelson's own obsessions as other Labour MPs accused him of seeking still to foment tensions between Mr Blair and Mr Brown. The Deputy Prime Minister, John Prescott, told him to shut up, while the Prime Minister's spokesman put him down with the withering observation that he spoke "as a backbencher on his own behalf".
As the police threw new security bollards around the Palace of Westminster, a colleague joked that they were designed to block Mandelson, "the suicide bomber." What on earth did he think he was doing? was the question of the week; "There'll be no comeback to the cabinet now," the firm conclusion.
In simple terms, it seems clear Mr Mandelson fears that Mr Blair is weak in the face of the Chancellor's obduracy. For all the sneering by No 10 aides, moreover, he will have noticed Mr Blair declined Iain Duncan Smith's invitation to repudiate the Mandelson analysis - that euro entry is essential to Britain's interest.
We may suspect Mr Blair does not repudiate this assessment because it is broadly his own. Mr Mandelson's offence was to let us in on the secret, and to enable us better, come June 9th, to judge whether it is Mr Blair or Mr Brown who determines New Labour's European policy.
Gordon Brown: power of decision was finally being wrested from him