Should Mandelson be allowed back?

Two days after he had been sacked from the Cabinet for the second time, Peter Mandelson had bitter phone conversations with the men he held responsible for his downfall. The executed Minister's protestations that he was the victim of a gross miscarriage of justice fell on stony deaf ears. When he complained to the Cabinet Secretary that he had found evidence about his role in the Hinduja Affair which "changed everything", Sir Richard Wilson responded that it changed nothing.

The exchange between Mr Mandelson and Alastair Campbell was an expletivepeppered shouting match. "I told you, you got it wrong," the twice-fallen Minister exploded at his erstwhile collaborator. "You swept me out in the gutter like a piece of old rubbish." Nor did he get any succour from Derry Irvine. When the Lord Chancellor suggested that he get on with the rest of his life, Mr Mandelson raged down the mouthpiece: "It may be water under the bridge to you! It's not water under the bridge to me!"

No, indeed not. More than a year after his ejection from the Cabinet, the Hinduja Affair is being stirred up again. By, of all people, Peter Mandelson himself. You might have thought that the last thing he would want is to revisit one of the least flattering and most traumatic episodes of his turbulent career. Yet he appears to believe that a further dip in the murky waters of the Hinduja will cleanse his reputation, perhaps even help effect a full rehabilitation.

Sir Anthony Hammond is now examining documents - Whitehall memos which were mysteriously unavailable to him at the time of his original inquiry - which Mr Mandelson believes will demonstrate the absolute propriety of how he dealt with the Hindujas' applications for British passports. These papers are said to show that civil servants dealt with the Home Office.

Even if "Skippy" Hammond finds in his favour, it is not likely to convince everyone that Peter Mandelson is a sea-green pure innocent so grievously wronged that he should be restored to the Cabinet forthwith. Even if he can show that officials did communicate with the Home Office, that will not necessarily prove that he did not also speak to Mike O'Brien, the immigration minister at the time, who has insisted that he had a conversation with Mr Mandelson about the Hindujas. In his own evidence to the Hammond inquiry, the MP for Hartlepool himself conceded that it was quite possible that he raised the matter with Mr O'Brien in the division lobby.

What is even more remarkable is that Tony Blair should sanction a reopening of this especially unappetising can of worms. And especially when his Government is fighting off another barrage of allegations about cash-for-favours in respect of Enron.

The official line has always been that he sacked his friend because the Prime Minister came to believe that he had lied to The Observer, caused another Cabinet Minister to mislead Parliament, and had then been less than candid with Mr Blair himself. But since when was being parsimonious with the truth a capital offence in this Government-Mr Mandelson's blisteringresentment about his treatment by Mr Blair has been fired by the suspicion that he was terminated with such extreme prejudice because Number 10 was nervous about further exposure of its own intimate entanglements with the Hindujas. Another memo it would be worth Sir Anthony having a look at is one from Jonathan Powell, the Prime Minister's Chief of Staff, urging Mr Mandelson to pursue the Hindujas' offer to donate to the Dome.

Revisiting this ugly and searing chapter in his Government's life is a favour Mr Blair would have conceded to no one else I can think of. Put simply, I suspect the Prime Minister feels guilty. He wonders whether he could have saved his old friend and confidant who paid a massive penalty for dealings with the Hindujas which were no less ill-advised than the Prime Minister's own embroilment with the brothers. Between the two men, feelings of betrayal and bitterness wrestle with those of debt and dependency. Though Mr Blair has twice sacked him, he continues to use Mr Mandelson as a close counsellor. The Mandelsonian fluence was again detectable in the Prime Minister's inflammatory attack on union " wreckers" opposed to the Government's plans for the public services.

The greater dependence is on the part of Mr Mandelson. If he is ever to resume a prominent place in public life, the Prime Minister is the only person who can make it happen - and one of the very few who might want it to happen. Conspiracyminded Labour MPs view the reopening of the Hinduja inquiry as preparing the way for his return to the Cabinet. They have reacted with the fear and horror of Harry Potter and chums being told that the Dark Lord Voldemort is rising again.

Peter Mandelson would not be human - he certainly would not be Peter Mandelson - if he did not entertain a dream that this could happen. Whatever his well-chronicled flaws, he is a man of undoubted energy and talent. He could have gone off to make an extremely lucrative living outside politics. He did not do so because the urge to power is embedded in his DNA.

Even Tony Blair would struggle to arrange a Third Coming of Peter Mandelson. It would mean sitting him around the same Cabinet table as Jack Straw and Clare Short, who have publicly branded him as someone who is untruthful. Gordon Brown would tell the Prime Minister he was mad. It would happen against a clamour of opposition by nearly all the influential figures at Number 10, especially Alastair Campbell.

There is another job in the Prime Minister's gift. The role is as important, if not more so, than many in the Cabinet. It is a position of some power and glamour, with lots of opportunities for travel, which Peter Mandelson would absolutely love. In a bit over two years' time, Mr Blair will be deciding who should be Britain's next European Commissioners. It may be shrewd to regard this "new evidence" about the Hindujas as Peter Mandelson's application for a ticket to Brussels.

Andrew Rawnsley is chief political commentator of The Observer.