The "news" that Nick Clegg demanded Gordon Brown's head as the price of a Lab-Lib coalition will come as a surprise to almost no one, though it's the first time we've had this story confirmed by one of the negotiators.

But the Times's serialisation of Peter Mandelson's memoir The Third Man (an important test case for the paywall) still contains much of note. Top of the list is the revelation that Tony Blair was unambiguously opposed to a deal between the two parties.

According to Mandelson, Blair said: "There will be an outcry if we stay on . . . There's going to be another election, and we'll be smashed if we don't make the right judgements." He later warned that it would be a "constitutional outrage" for Labour to remain in office. Perhaps it's not surprising that Blair, who won three consecutive elections, was unsympathetic to calls for his party to cling on to power.

We also learn that Mandelson, an exceptionally perceptive politician, was one of the few Labour figures to recognise the significance of David Cameron's "big, comprehensive offer" to the Lib Dems:

I was almost alone in our ranks in being impressed. Gordon and his team told me they felt it was a mistaken show of weakness, given that the Tories had won the largest number of seats. To me, it sounded like the new politics. In the past, I had felt that Cameron was not bold enough about changing his party. But now he was acting boldly, and if he pulled off a deal with the Lib Dems the alliance would offer him a renewed prospect of delivering a changed perception of his party.

The growing evidence that Cameron views the coalition not as an alliance of convenience, but as a vehicle to realign British politics, suggests that this interpretation was right.

In a helpful bit of PR, it was also Mandelson who ordered Brown to stop referring to Nick Clegg's party as the "Liberals". "If you're serious perhaps you should stop calling them the Liberals and get their name right," he said.

Finally, we learn which Lib Dems would have made it into Brown's new cabinet. Mandelson writes: "He envisaged Nick being in charge of constitutional reform, Chris Huhne at Energy, David Laws at Culture, Media and Sport, and Paddy Ashdown as Defence Secretary." Vince Cable would have been given "an economic portfolio".

One of the ironies of all this is that it was Brown, in the early, hopeful days of his premiership, who first invited Lib Dems to join the cabinet.

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