"I think if the party were to be taken over by those who want to reject new Labour, reject what the party has done over the past decade and all its achievements - we would be inviting a very long time in opposition."
Standing at the window of his hotel room in Manchester, Peter Mandelson is apprehensive as he talks about what has gone wrong with the Brown government and how best to repair the damage. Before this meeting, he repeatedly said he would not go on the record; that he is wary of interviews. But having spent two days at the party conference, and deciding that the need for a carefully planned revival of the party is more "urgent" than ever, Mandelson agrees to make his most wide-ranging intervention on British politics since leaving the country for the European Commission in 2004.
His message is clear. The government must not move to the left; rather, it must create a fresh and coherent strategy to "renew new Labour" and win the next election.
First, the obvious leadership question. Mandelson finally disappoints those rebel MPs who have been agitating for Gordon Brown's departure by supporting the Prime Minister - but with a strong qualification. "I do not think changing the face at the top is the panacea some imagine," he says. "But the whole of the leadership must remain true to the values and prin ciples that have delivered us success in the past ten years."
Since May, Mandelson has been talking again to his old rival Gordon Brown, and not just about the Doha round of trade talks that have dominated his role as Commissioner for External Trade in recent months. "It would be odd if we didn't discuss domestic issues," he says. "We have a shared interest in Labour's fortunes. [But] the last thing Gordon needs is another full-time adviser."
The relationship between Mandelson and Brown has always been more complicated, and emotional, than is widely thought. Each could not be more different in personality - one a witty, metropolitan sophisticate, the other an intellectual hardened by the machinations of Scottish politics - but their fortunes became interconnected through a mutual desire for Labour to become the natural party of government.
From 1985, when this former London Weekend Television producer arrived as director of campaigns and communications at Labour's then headquarters in Walworth Road, south London, Mandelson worked closely with both Brown and Tony Blair, the two MPs who - in that order - he believed would lead the party into government. After John Smith's sudden death in 1994, Mandelson agonised as he found himself caught between loyalty to Brown and the realisation that Blair would ultimately emerge as leader of the party.
Soon after, it would be reported and accepted as conventional wisdom that Mandelson had duplicitously betrayed Brown by moving early to support Blair; it became part of the myth of how Brown was robbed of the leadership. But in spite of this and their many arguments in the past, there remains a mutual respect. It has been said that Brown's hostility to Mandelson had less to do with Mandelson than with his own, unstable relationship with Blair. The reality is that, with Blair out of the way, relations have become easier.
"I don't think one has to be a brilliant psycho-analyst to see that there was quite a lot of transfer of anger on to Peter that couldn't be inflicted on Blair himself. That came from the Labour Party generally and also from Brown and the people around him," says the novelist Robert Harris, one of Mandelson's most loyal friends.
"We have had our ups and downs," Mandelson says of Brown. "But remember, we have known each other for over 20 years."
Asked if Brown's leadership is the disaster that, in private, some Labour MPs say it is, Mandelson disagrees. "I don't accept that judgement of him, and I really don't think this is simply a matter of personalities."
What of Brown's personality? What are his qualities? "The reason why Gordon's speech at conference was a success was that it opened more of a window on to Gordon Brown," Mandelson says later, speaking from China. "The public want to feel a connection, a personal one, with their prime ministers. They know he has a full head of policy ideas and experience. But they also want to know more about him. These are serious times. But that doesn't mean he has to be only about policy, and he showed another side of him."
His support is not unequivocal. "It's a matter of political choices. A choice of who we are, what we stand for and what we want to do for our country. Do we want to go back to some variation of Seventies/Eighties Labour politics? Why should our voters be interested in that? You are saying to people: Go ahead, vote for the Conservatives instead. David Cameron would just have to sit back and watch the votes come rolling in. Labour would no longer deserve to win."
Walking around the conference halls with Mandelson in Manchester, I was struck by how warmly so many cabinet ministers embraced him. And yet, also present were many of his old enemies, including Charlie Whelan, Brown's old spin doctor who is now political director for Unite, the UK's largest union. Whelan was busy briefing journalists at the conference, as well as speaking to ministers.
Mandelson warns Brown not to be swayed by such voices. "When I listen to some of the trade union leaders and others who are organising hard on the left of the party, demanding renationalisation and an end to new Labour, sneering at the so-called Blairites, I realise there are still those who prefer the comfort of opposition to the hard tasks of government.
"If anyone thinks that the party has a future by splitting the difference between the old left and new Labour, that we can take six of one and half a dozen of the other and rebuild the party around that, we will go downhill fast. Because the country has to have a real sense of what we are about, a clear definition, and there has to be a hard edge to the party in what we stand for and how we present ourselves to the electorate. Not nodding in this direction, then that direction, pleasing this group, reaching out to the other, without any clear, purposeful direction.
"The public will conclude we are more interested in shoring up our own ranks and maintaining the appearance of unity than governing with a real project. The new Labour way is harder because it requires both more imagination and more rigour. It also takes more courage to demand change than unity. I came away from conference having talked to many former colleagues and friends and I've never felt such a sense of urgency for Labour to think through how it's going to win the next election."
There is a sense that the government has been too passive for too long. "We have to have more imagination and better ideas . . . I don't feel resigned to defeat, I don't feel fatalistic. I can't bear these people who, looking over the precipice, are frozen into inaction.
"That's not what got us into government in the first place, that's not what has driven us forward these past ten years, and there's no reason why we should be paralysed by our prospects now."
Born in 1953, Mandelson grew up in Hampstead Garden Suburb, in north-west London, where Harold and Mary Wilson were neighbours and good friends of the family: Tony, Mandelson's father, an advertising manager for the Jewish Chronicle, his mother, Mary (Herbert Morrison's daughter), and his elder brother, Miles. The young Mandelson was active in the Young Socialists while at Hendon County Grammar. After a period as Labour represen tative for Stockwell on Lambeth Council, he joined an elite band of young producers at LWT working on Weekend World, presented by the former Labour MP Brian Walden. In 1985, he applied for the role of Lab our's communications and campaigns director. The successful candidate remembers entering the party's dreary office, with its barely functioning table and chair, and having to start, against the odds, the job of helping remake the party and presenting it to the outside world as changed.
Mandelson was always more than just a PR man; and when, with Tony Blair's help, he sought and won his own seat in Hartlepool in 1992, the then leader, Neil Kinnock, and his chief of staff, Charles Clarke, were angry that such a trusted consigliere should wish to strike out on his own. After Labour's landslide in 1997, Blair made Mandelson minister without portfolio, then moved him to the Department of Trade and Industry the following year. But that December, someone close to Brown leaked news that, in 1996, Mandelson had helped fund the purchase of a house in Notting Hill with a secret loan from his fellow Labour minister Geoffrey Robinson. Mandelson resigned and was forced to return to the back benches. But as early as the following autumn, Blair brought back his old ally as Northern Ireland secretary.
In January 2001, he was brought down again after it was alleged that he had intervened on behalf of Srichand Hinduja, a businessman and sponsor of the Millennium Dome who was seeking a British passport. Mandelson still protests his innocence in the affair - and with some justification, given that he was cleared by the sub sequent Hammond inquiry. At this point, the cabinet career of one whom even the fiercest of critics accept is a man of rare talent was prematurely ended.
Robert Harris thinks these incidents should not be allowed to overshadow Mandelson's qualities and achievements. "Peter has a very good strategic sense," he says. "Of all the politicians I've ever spoken to, I think he's the sharpest, the most analytical. Oddly enough, I think that probably his most important time was before Labour came to power and during the government's early days. It may be that, when one looks back on it, this was always going to be his biggest contribution."
Reflecting now on the period during which Labour was preparing for a return to power, Mandelson says: "Recovery has got to be fought for. I hate the fatalism that some seem to have about Labour's prospects. If you battled your way through the Eighties and early Nineties as I did, when the situation in the party was dire compared to what it is now, you realise that you have to fight back. You don't resign yourself to losing or to thinking your opponents have found some magic formula for success.
"But what we also learned in the Nineties is that to win, you have to have purpose and direction. You need a very clear proposition to put to the electorate, and you have to have a clear sense of what you want to use your power for. Inevitably, it's more difficult when you've been in office for as long as Labour has, but it doesn't mean it is impossible to do."
Despite this, he qualifies his support for the "campaign for a fourth term" launched by John Prescott and Alastair Campbell in the New Statesman a fortnight ago. At the Labour conference, Prescott - who once compared Mandelson to a crab - was energetically handing out "Go Fourth" stickers to delegates.
Without being prompted, Mandelson says: "Rather than talk about the fourth term as if we are owed it, and that all we need to do is shout loudly enough for it, you have to work out what your project is. It has to be an extension of what you've done to date, built on what you've done so far, but it has to be about the future, not the past. If the Labour Party can renew new Labour afresh, I believe it has a real chance of winning the next election. But it has to be worked for and earned, not just demanded."
What does he say to the rebel MPs, led by Charles Clarke, who called for a leadership election before conference? "There is an attempt to brand all critics of the government as Blairites in order to isolate them and present their cause as one half of a destructive civil war." In a direct rebuke of the formula used by Prescott, he adds: "They are not Blairites or Brownites or bitterites. They are people who want the party to be successful, to win again."
Does he accept the media assumption that the Conservative Party has changed and "modernised" under David Cameron? "They have managed to change their image rather quickly by shedding some of the dogma, but I don't think they have done the equivalent major changes and I don't think they have carried the party entirely with them. [But] it is no use just attacking the opposition. We need to be confident in our own message. Labour's renewal has to come from within, not from simply refining our anti-Tory strategy, as some seem to think. That's not the way to a fourth term. When you have been in office this long, your main challenge is to renew yourself. If we cannot do that we will lose."
At his most “Mandelsonian”, he remains a constant scourge of the left, critical of those who take the dark view that Labour has run out of ideas
Earlier in the summer, while on holiday in Corfu, Mandelson dined with the shadow chancellor George Osborne. "[It was] by chance, rather than by choice, with 20 other people," he explains. "But I did enjoy talking to him, because I haven't known him previously and I wanted to find out what he's made of." And what is he made of? "I decided that a chance encounter in a Greek taverna didn't equip me well enough to form a judgement."
Mandelson looks pained - almost haunted - as he describes the reversal of the opinion polls over the past year, and accepts that Labour's plight is more grave than at any time under Blair. "I think that Labour has been thrown by what's happened. A lot of people active in the party now haven't known a time when we're not ahead in the polls. It's only in the last year that we've experienced such a reverse in support. But polls are like share prices - what goes down can come up as long as there's a change in performance."
At his most "Mandelsonian" - some might say paranoid - he remains a constant scourge of the left, critical of those who take the dark view that Labour has run out of ideas and should seek "to renew itself in opposition".
"I think the people eager for Labour to renew in opposition are those who see the chance to overturn new Labour and revert to the vote-losing policies of the old left. They are the same people who talk about a core vote and how we should return to our heartlands. In other words, cease to be a broadly based party, north and south, young and old, across geographical and professional boundaries.
"Those who say that are simply inviting defeat at the next election. That is exactly what the left said as the Labour government came to a close at the end of the Seventies; indeed, listening to some in Manchester, I'm rather reminded of that time where the old left were feigning support for the government and the leadership, but in reality were hastening its end.
"They wanted to take over the party and lead it backwards into the nearest cul de sac. We all know where that led. We spent the next 18 years languishing in the wilderness."
Instead, he says, the non-partisan, all-encompassing nationwide appeal that contributed to Labour winning two landslide election victories must be rediscovered. "We have to look at the whole country as our constituency, in the way that we did in 1997. We didn't look at Labour voters and non-Labour voters, heartland voters and non-heartland voters in 1997 - we looked at the voters as a whole, we looked at the country as a whole, everyone a potential Labour voter. People who agreed with what we wanted to do for the country, who recognised that we had put our class instincts behind us, and who were ready to embrace a modern economy in a sensible and disciplined way."
The work Mandelson did as one of the three principal architects of new Labour wasn't "about heartlands or Labour people and non-Labour people - it was about everyone". So what does he think of the left's mobilisation and agitation for a change of direction under the banner of Compass and the unions? "If the Labour Party reverts to that sectional, class-based way, then we can say goodbye to power altogether."
Later, as he walks in the Manchester sunshine on a lovely late summer evening, Mandelson speaks for the first time about his future beyond his present job, a job that has made him more powerful than most in the cabinet. "I enjoy my job. I couldn't have asked for a better brief than world trade. But I don't know what I am going to do next year when my term runs out. I am not seeking a second term. It's odd, because on the occasions that I come to London now I feel like a bit of a tourist, and I don't like that."
In person, Mandelson has the presence of a man who has learned much from his travels. "I will always want to remain in the world, in an international role, whatever I do, because I've enjoyed going to so many countries, learning so much. But, equally, it would be nice to have my home base back again."
Some ministers - especially those close to David Miliband, whose speech he watched from the front row after being excitedly greeted by a party steward - talk of a return to government for Mandelson. To others, the idea is absurd. But every previous former EU commissioner has been appointed to the Lords, and it is common for ministers and shadow ministers to be appointed from the Upper House.
Does he want to return to front-line politics? Mandelson says he hasn't given it a "second's thought", but adds: "Well, I care a lot about British politics, and as I travel I realise that British politics are among the best, the cleanest and the most civilised in the world . . .
"I'll always be contributing to Labour in one form or another, but I don't know what I will do professionally. You can be active in politics without being in parliament, and obviously I don't see a return to the House of Commons."
In 1935 Mandelson's grandfather Herbert Morrison was returned to parliament for the second time - and ran unsuccessfully against Clement Attlee for the Labour leadership. Mandelson once said that his ultimate ambition was to become foreign secretary. That hope may now seem unrealistic. Yet, given his experience from the past few years, after his second, reluctant resignation from the cabinet, it would be unwise to rule out some future international role for a natural-born politician who has come back many times before.