Peter Mandelson: 'Prince of Darkness' who travels the world spreading the gospel for New Labour

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After more than two years in the political wilderness, Peter Mandelson feels he has finally found a new role. The bad news for his many enemies is that it lies at the heart of the New Labour project.

His critics still enjoy dancing on the political grave dug by his second resignation from the Cabinet in January 2001 over his involvement with the Hinduja brothers. Last week, several newspapers said he had been rebuked by the Prime Minister's official spokesman for saying in a radio interview that Mr Blair wanted a euro referendum before the next general election. Even as a backbench MP, Mr Mandelson makes more headlines than many ministers.

Downing Street's record of the Lobby briefing says that its spokesman did not criticise Mr Mandelson but press reports that Gordon Brown could be ousted from the Treasury. "For some in the media, I am public enemy number one," Mr Mandelson says as he reads newspaper cuttings about his "rebuke". "Obviously, I am not a stranger to controversy, either at a political or a personal level. I have been at the cutting edge of change in the party since I became Neil Kinnock's director of communications in 1985.

"For some – but by no means all – in the party, I was the fall guy for the creation of New Labour and a great deal of what Tony Blair and Gordon Brown have achieved over the past decade."

Having risen from his grave, what does the man dubbed the "Prince of Darkness" actually do? Well, one thing is a lot of travelling as he spreads the New Labour gospel abroad and meets the movers-and-shakers on the international circuit. Last year, there were trips to the US, Austria, South Africa, Hungary, Israel, the Far East, Russia and India. This year, he has visited Germany, Italy, Spain and Sweden. Last week he was at the United Nations in New York for "meetings."

Is he an unofficial envoy for Mr Blair? "No," he replies in his new oak-panelled Commons office in Portcullis House, overlooking the Thames. But surely he tells the Prime Minister what he picks up on his travels? "Of course I do." How often does he talk to Mr Blair? "I speak to him enough to maintain our friendship and our close alliance."

Significantly, Mr Mandelson meets Alastair Campbell, Mr Blair's closest ally, once a week. This is surprising; Mr Campbell demanded his head over the Hinduja affair and is believed to have wanted him to stand down as MP for Hartlepool too.

Some enemies suspect that Mr Mandelson was never really out of the loop. "Perhaps surprisingly, my friendship with the Prime Minister was not ruptured by what happened," he says. "With Alastair, things took longer to heal, but after a year we were on really good terms again."

What about his relationship with Mr Brown, who believes Mr Mandelson betrayed him by backing Mr Blair as the modernisers' standard-bearer in the 1994 leadership election? Today, the Brown camp instinctively blames Mr Mandelson whenever the press reports splits between the Prime Minister and Chancellor. As one Brown ally put it: "We know when he's back on the scene."

Mr Brown believes that Mr Mandelson's radio interview was a direct riposte to a newspaper report last Sunday that the Chancellor was about to say "no" to the euro. Mr Mandelson insists it was not, because the interview was recorded the previous Friday.

"I feel perfectly friendly towards Gordon," he says. "I respect his intellect, his strength of personality, his commitment to the party's success and not least his management of the economy." Has he discussed the euro with the Chancellor? "No. I think I am definitely a bit out of the loop there and with every mention of the euro, I am a bit more persona non grata."

Travelling the world allows Mr Mandelson to speak more freely than he could as a minister. "Being honest with myself and my views is a liberation – or at least a mild tonic. It does you a power of good. There is no other point in being in politics. I have never been a fence-sitter and never will be. You take the rough with the smooth as a consequence," he says.

As New Labour's export manager, he attracts less publicity than he did as a minister. "Of course I miss government. Among all the unkind and uncharitable things said about me, no one has ever argued that I was an ineffective or inefficient minister. But it is not the be all and end all of political life."

He felt a sense of "injustice" because he was subsequently cleared by the inquiry into the Hinduja affair. "Having done my fair share of wallowing in self-pity, I long ago determined to shake myself out of it. I have my black days. I don't pretend it has been anything but hard and demoralising to be separated from the implementation of the New Labour project I care so much about and have given my adult life to. But you can't rewrite history."

He adds: "I am happy now. I feel a sense of release after what has been a difficult couple of years. I feel I have been tested and experienced a lot of adversity, but that I found some strength in my political beliefs. Any cause I fought for I have done so uncompromisingly and no doubt that has contributed to the various enemies I picked up along the way."

This week, Mr Mandelson will chair a two-day meeting of 80 to 100 experts to prepare for a "Progressive Governance" summit in London in July, to be attended by Mr Blair, Germany's Chancellor, Gerhard Schröder, and centre-left leaders from countries including the US, Sweden, Brazil and South Africa. A parallel conference of 300 to 400 party strategists and activists, think-tankers and experts will run alongside it.

The aim is to come up with new ideas and policies for the centre left. Although Mr Blair's Third Way often seems vague and meaningless, Mr Mandelson insists the conferences will discuss bread-and-butter issues such as crime, anti-social behaviour and asylum. He believes Labour has fared better than left-of-centre parties in France, Italy, Spain and Germany because it is more coherent. "I am not saying there is a single Blairite blueprint that can be applied to every country. Each national situation is different, but we have a lot to learn from each other."

Of course, the Iraq war has not made Mr Mandelson's task any easier. He admits that "anti-Americanism" provided a good rallying cry for some left-of-centre parties, but insists that many of Mr Blair's critics have an underlying respect for what he did in Iraq.

The timing of the July conferences is fortunate: having spent several months focused on Iraq, Mr Blair now needs to map out his domestic agenda.

Mr Mandelson explains: "The Government's political project needs to be redefined in the public's mind. It needs to be put up in lights, otherwise people will lose the sense of what the Government is doing and why. This is what bedevilled Labour and Conservative governments in the past – a clear sense of mission and vision, a strong narrative accompanying it is lost and the connection with the voters is weakened."

The Mandelson prescription is to be bold. "Where we have made most progress is in the policy areas where we have been most New Labour – education, health and the economy – and had the courage of our convictions. That has to apply across the board in the Government. Putting off hard choices, refusing to contemplate the more radical options, not risking your neck and the flak that inevitably comes from making difficult decisions, does not serve the country or New Labour well in the long term."

Mr Mandelson "believes" in Mr Blair more than ever because of "the guts he showed over Iraq when the world and its dog was heaping pressure on him to back down from what was the right decision." He describes Mr Blair as "more his own man than he ever was. He is more self-confident, more self-reliant. He has moved rapidly along many learning curves, but without losing his modesty, his humour, his capacity for friendship."

But Mr Mandelson points out, rather snappily, that "Tony Blair is not the only one to be 50 this year". He will reach his milestone in October, five months after the PM. "I have to work out where I am going," he says. The answer is to do "more of the same but more intensively. There is still a lot more to do in politics."

The former cabinet minister insists he is "reconciled to not being a member of the Government. I don't expect it and I don't seek it." But, he adds with a smile: "I will never be far from the Government or from the Prime Minister, but finding my own bearings nonetheless. I am not going to disappear."