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Peter Riddell: Brown binds in Blairites | Incredible end to feud | Who's who in Cabinet | Comment Central: Blair's fury | Pictures: Cabinet reshuffle | In full: the new Cabinet | Brown's economic 'war cabinet'
Gordon Brown staked his premiership on the shock return of Peter Mandelson and the defeat of the economic crisis yesterday, in the most daring reshuffle of modern times.
He gambled by bringing back the twice-resigned Mr Mandelson from Brussels, elevating him to the Lords and making him his Business Secretary, as he promised to reinvent his Government to tackle the slump.
The former sworn enemies, two thirds of the triumvirate that created new Labour with Tony Blair, were suddenly back together after an astonishing reconciliation that began last Easter, developed with almost daily telephone chats, and ended with Mr Brown offering Mr Mandelson a job on Thursday.
According to one of the handful who knew one of the best-kept secrets of any reshuffle, Mr Mandelson “bit his hand off”. The precise job was decided this week and, according to friends, was a “bombshell” to Mr Mandelson, who did not seek it. Mr Brown decided to bring him back to shore up his leadership and make use of the business skills accumulated during a former incarnation as Trade Secretary and as Brussels Trade Commissioner, a job he abruptly leaves.
At one stroke Mr Brown has neutralised the threat from Blairite ministers, who many believed might leave the Cabinet in the autumn to try to force Mr Brown’s departure. With the arch priest of Blairism back at Mr Brown’s side, such gestures would be pointless.
Mr Mandelson has come back because he wants to help Mr Brown to fight a resurgent Tory party that, if current polls were translated into the next election result, could destroy their new Labour project. “All hands on deck,” was the way a clearly delighted new minister explained his recall. The twice-resigned Mr Mandelson joked that it was “third time lucky”.
Although they have had massive differences over the years, Mr Mandelson has made plain that replacing Mr Brown would be “no panacea” for a Labour recovery.
The risk for Mr Brown is that Mr Mandelson is an unpopular figure with Labour MPs and the unions, and he could suffer a backlash from his own natural supporters if things go wrong. But Mr Brown, clearly emboldened by a successful Labour conference and praise for his handling of the global banking crisis, felt strong enough to take the plunge.
Mr Mandelson admitted that he and Mr Brown had had “ups and downs” but said that he was “very proud to have been invited to serve in his Government”.
In another key move Mr Brown gave the arch Blairite John Hutton, whom some have seen as a possible quitter from the Cabinet, the job he wanted: Defence Secretary. To balance those changes he appointed one of his most loyal allies, Nick Brown, as Chief Whip, and another, Ed Miliband, heads a new Department for Energy and Climate Change.
Mr Brown presented the changes as his response to the challenges of financial instability and oil and food price rises. He knows that his only hope of recovery is to show that Labour, and not the Tories, are best placed to help Britain through the bad times.
Twelve Cabinet ministers will serve on a new Cobra-style National Economic Council that will meet twice weekly during the crisis. Paul Myners, former chairman of Marks & Spencer, has been made City minister. Lord Drayson, returning after a sabbatical racing sports cars in America, becomes skills minister.
Asked if he had taken leave of his senses over Mr Mandelson, Mr Brown acknowledged past problems: “Whatever the ups and downs have been in the past, everybody has got to come together and make sure as a nation we come through this successfully.”
Margaret Beckett also returns as Housing Minister. Des Browne, the former Defence Secretary, leaves the Cabinet, along with Ruth Kelly and Baroness Ashton of Upholland, the former Lords leader, who is replacing Mr Mandelson in Brussels.

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Brown's daring gamble? Brown's Faustian pact.
BHC, Cape Province, South Africa
I see Peter Mandelson has beaten Keith Vaz to the House of un-elected Lords !.
Kenneth O'Boyle, Perth, UK
Who says Margret Beckett capable? The only thing she has done is claim for her garden on MPs expenses. When at Defra she instigated the shambolic farm payment system that cost the UK £800million, that works out at £27.00 per taxpayer.
Paul, Lincoln, UK
Deadbeats, losers and now a creep.
Rob, Warfield, England
Rob, Horsham: You got one thing wrong. This is not a man of doubtful integrity. He has been sacked twice from high office for moral turpitude and crimes for which he could have been imprisoned, and here he is again.
Truly if he is the best this country can do we are done for. Sic transit ....
John Annis, London,
It is an affront to our so-called democracy to have a twice-disgraced former member of the Government installed in the House of Lords so he can become an unelected political adviser to an unelected PM. Mandelson is not wanted as a Minister but is needed to keep potential rebels in check. Disgraceful
Donna Walker, Effingham, England
Mr Mandelson calls for 'all hands on deck' Too late I'm afraid. It's 'Clear the decks' more likely. The SS Labour is heading towards the rocks, and fast.
Frank Greaney, Liverpool,
Bringing back a twice disgraced politician shows how bereft of any substance Mr brown, and this Government really is. It won't work for Brown personally, or for a Government that has demonstrated a total lack of integrity in every way imaginable.
D. Sloan, Edinburgh,
"This is the first clever act of Brown's Premiership. It's quite worrying actually - he could actually win the next election if he carries on like this!"
I had a real giggle at that one Martin. You should be on the stage.
Tony Pritchard, Cancun, Mexico
At times like this content counts if you want to feed the country's poorer mouths.
We need people who can move mountains with a few well placed calls. In the UK economy the right leadership can make a difference of at least 1000 billion pounds in 2 - 3 years.
A decision that deserves real respect.
David Gorbach, London, England
This appointment is an insult to decent ,right minded people.Gordon Brown is rewarding failure,lost my vote for good and handed the Tories victory in the next Election.Not bad for a days work !
Philip, Brantree,
when you are relying on a failed career politician,that has offered this country nothing in government and as a ec politician,other than an abilty to jump on a polical gravy train,this government may as well give up now and call an election.
simon hunt, manchester, england
Brown and his red flag brigade are finished. Socialism is dead and has no place in the world today. They will never win the next election.
David, Swansea, UK
Martin, you're wrong It's the final nail ending labour's reelection. It's a political move to keep Brown's job and nothing to do with what's good for the country. The voters will not stand for a return of a twice disgraced man.And if Brown thinks he is the best man God help us for the future
bill, cornwall,
Reappointing a man of doubtful integrity on the grounds that his business acumen is of current value is probably a testament to Brown's ability to spot a horse for this particular course. However, I doubt the business world would be as flattered.
Moral bankruptcy is now complete.
rob, Horsham, UK
Thing is, Brown appointed some really useless people when he got in. Now, when it's almost too late he's made a crazy but maybe brilliant move.
Mandy and Beckett are both people you want on your side. And he's kept Milliband in there just in case he does have to bail out himself. V clever & cunning
Michael, Bracknell, UK
Had Brown included Mandelson & Beckett in his first Cabinet he might have looked more the true Statesman, to keep this experience out of top Governemnt posts, bringing it back at the 11th hour shows real cynicism, and the vacuity of those promoted in their place. The electorate will not be fooled.
Alastair, Rye, UK
The return of Mandelson is probably the biggest compliment Brown has ever paid the Conservative Party. He is obviously a very worried, desperate Prime MInister. The nearest comparison in Conservative circles, is if Cameron, in his next reshuffle, made Lord NormanTebbit Shadow Home Secretary.
Michael Dixon, Sunderland, England
This is the first clever act of Brown's Premiership. It's quite worrying actually - he could actually win the next election if he carries on like this!
Martin, Manchester, United Kingdom