Peter Mandelson has been handed a dramatic political comeback with a posting to Brussels as an EU commissioner.

After months of speculation the former Cabinet minister, who was twice forced to resign from government, was confirmed as the prime minister's choice on Friday.

"The prime minister has today nominated the right honourable Peter Mandelson as the UK's next European commissioner," a Downing Street spokesman said.

"The prime minister telephoned the president-elect of the Commission earlier today to propose this nomination and received a positive response."

Tony Blair said the controversial figure was the best available.

"The job of European commissioner is a vitally important position for this country," he said.

"Europe is Britain's best economic market.

"How Europe develops, especially a Europe of 25, will be crucial for the future of Britain, which is why we need the very best person representing Britain in Europe and Peter Mandelson has the skills, ability and contacts in Europe to make a great success of it."

'Agony'

The Hartlepool MP will now have to give up his seat, triggering a tricky autumn by-election in the previously safe Labour constituency.

But the close prime ministerial ally said was he "delighted" with the rehabilitation of his frontline career after more than three years in the wilderness.

However, he said he had "agonised" over the move which is likely to mark the end of his Westminster ambitions.

"I am delighted to have been nominated by the prime minister to the post of UK European commissioner. It is a great honour as well as a huge challenge and I will give it my all," Mandelson said.

"I agonised over this decision because of my loyalty to my constituents in Hartlepool. Hartlepool has been the political bedrock
of my life.

"In the general election of 2001, local people saw through all the media hype and nonsense and stood by me. I will be forever indebted to them.

"I hesitated, too, because for better or worse, I have been one of the principal architects of New Labour and I have worked closely with Tony Blair and the team for nearly 20 years.

"However, I am not walking away from what New Labour represents and what it still has to achieve."

EU role

Mandelson also said he was looking forward to his new post in Brussels.

"The EU has created the largest economic market in the world and we have got to make it work," he said.

"I want a Europe that is pursuing economic reform, new jobs and protection from terrorist and other security threats, not a Europe that is over-regulated, bureaucratic and centralised.

"I look forward to working with the Commission president and my other future colleagues to create a Europe of which Britain can be fully part."

Controversial past

Mandelson was forced out of the Northern Ireland Office in the run-up to the general election in 2001 over claims that he intervened to help the controversial Hinduja brothers secure British passports.

He was subsequently cleared of any wrongdoing but this second resignation followed his earlier decision to quit as trade and industry secretary in 1998.

That resignation came after it emerged that he had an undeclared home loan from then Treasury minister Geoffrey Robinson.

A third frontline position then appeared unlikely but the vacancy in Brussels allowed Blair to make use of the skills of his friend without angering too many Labour MPs.

Mandelson has never been popular within the party because of his access to the leadership, spin doctor past and "modernising" views.

But his talents as a political strategist are unquestioned and Blair will be keen for him to put them to use promoting reform of the EU within the Commission and advancing the causes of the constitution and single currency at home.

Mandelson has long been a keen europhile and outside of the Cabinet - to which a comeback was always unlikely - this new post could be a dream job.

His next challenge will be to secure one of the plum portfolios in the new Commission which takes office in November under president and former Portuguese prime minister Jose Manuel Durao Barroso.

It is thought Blair had hoped the powerful position of vice-president and champion for economic reform would be given to the UK.

However a French or German commissioner is now expected to fill that role if it is created.

Reaction

The Conservative leader in the European parliament, Jonathan Evans, said Blair had ignored voters' wishes.

"This appointment shows that the prime minister has paid no attention to the results of the European elections," he claimed.

"Instead of appointing someone who would put Britain first, he has appointed Peter Mandelson, a man who is only interested in putting Peter Mandelson first."

However his Labour counterpart Gary Titley said Mandelson's experience would "stand him in good stead".

"Peter Mandelson has a long track record in British politics," he said.

"As a committed member of the European movement, I am certain he will now look forward to the challenges that European politics will have to offer with relish.

"He has been an excellent secretary of state for trade and industry, something that will stand him in good stead in the European Commission.

"His abilities as a consensus builder, battling against the odds, was evident during his time as secretary of state for Northern Ireland.

"These are important attributes that will serve him well in a college of 25 commissioners."

Former commissioner and Tory Cabinet minister Lord Brittan welcomed the appointment, but acknowledged that Mandelson has "many political enemies".

Ahead of the confirmation, eurosceptic Labour MP Ian Davidson said Mandelson would be "an appalling appointment".

"It will give the government an entirely avoidable by-election and I think we have to ask ourselves how this will be seen," he told the BBC.

"I think this will be seen as an example of arrogance by New Labour, bringing in somebody twice resigned, seen as a crony just of the prime minister, deeply unpopular in the Labour Party and, of course, it suggests there is no talent anywhere else.

"I think, as well, it is going to be seen as bad for the prime minister because it is going to be seen as a sign of weakness as if he was almost hypnotised by Peter Mandelson into making an offer."

But europhile Labour MP George Foulkes said he would boost the pro-EU cause.

"Peter is an able negotiator and a great administrator," he said.

"He knows most of the heads of government personally and will give a new dimension to British representation in Europe.

"He will very quickly confound his critics," he added.

By-election

Liberal Democrat foreign affairs spokesman Sir Menzies Campbell said his party would campaign hard in the forthcoming by-election following successes in overturning similar 10,000 plus majorities in Brent East and Leicester.

"Peter Mandelson's appointment is an illustration of the well-known political principle 'third time lucky'," he said.

"But it gives yet another opportunity to the Liberal Democrats to show that they can challenge Labour in its traditional heartlands."