Lord Mandelson and George Osborne shook hands today and tried to laugh off the spat over exactly what happened on their holiday in Greece.

The pair, who fell out spectacularly after staying with a Russian oligarch in Corfu this summer, were thrust together again on the stage at a political awards ceremony.

As guest of honour at the Threadneedle Spectator awards, shadow chancellor Mr Osborne was required to present a gong to Lord Mandelson.

Lord Mandelson was named “newcomer” of the year by the awards panel after his surprise return to the Cabinet as Business Secretary in Gordon Brown’s October reshuffle.

His return prompted Mr Osborne to claim last month that Lord Mandelson had been critical of the Prime Minister when they were guests of Oleg Deripaska, a Russian billionaire, in the summer.

Questions emerged over potential conflicts of interest for the politicians as it emerged that they had both accepted hospitality aboard Mr Deripaska’s yacht off the Greek island.

Mr Osborne was also forced to admit being present when a potential donation from the Russian - which would have been illegal - had been discussed.

At today’s awards, the Tory frontbencher said he had been unsure of the identity of the man he was to present the newcomer of the year award to.

“Then I remembered it was the guy I met on holiday,” he said. “You know how it is, the only other English guy in the resort, you swap stories about work back at home.

“You think you’re never going to see them again.”

Accepting the award, Lord Mandelson said: “Having been marched down the political gangplank a few times it is great to be back on board - as they say in Corfu.”

The pair were seated opposite each other at the top table. In the same awards, Liberal Democrat frontbencher Vince Cable was today named Parliamentarian of the year in recognition of his performance on the economic downturn.

Boris Johnson was voted politician of the year by the same panel, after unseating Ken Livingstone as Mayor of London in May.

Baroness Manningham-Buller, the former director general of MI5 who dramatically opposed the plans for 42-day detention without trial for terror suspects, was named peer of the year.

Spectator editor Matthew d’Ancona said: “Vince Cable and Boris Johnson have been riveting personalities on the political stage this year, combining, in their different ways, rhetorical power, popular appeal, dogged determination and a ferocious devotion to the public they serve.”

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