David Miliband camp blames Mandelson for defeat

The love affair between Lord Mandelson and New Labour is finally – and this time irretrievably – over. The Prince of Darkness has been cast into the political wilderness once and for all, blamed directly for David Miliband's failure to win the party leadership.

The controversial former cabinet minister, Tony Blair's closest aide and architect of Gordon Brown's survival, was last night fiercely condemned by younger members of the New Labour establishment over his attacks on Ed Miliband during the final weeks of the campaign.

Five MPs who had backed David Miliband for the leadership are thought to have switched allegiance to his younger brother after Lord Mandelson's attacks. A senior aide to the defeated leadership contender said he wished the peer had been at the bottom of a river "wearing concrete boots" on the August Bank Holiday when he warned that Ed Miliband could lead Labour into "an electoral cul-de-sac".

Lord Mandelson added: "To suggest that we should be concentrating on our core voters rather than looking to professional people and affluent people is by way of saying that we want to remain a minority party." He also said he was "absolutely mystified" by Labour's election manifesto, which Ed Miliband wrote.

But the intervention created the impression that he was in effect "running" the David Miliband campaign, and cost vital votes in the incredibly close contest. Last night Teresa Pearce, the Labour MP for Erith and Thamesmead, said Lord Mandelson's interventions had been decisive as she worked out who to support: "I supported Ed Balls but it seemed unlikely he would have enough support to win, so I realised my second preference would be important. I found it difficult to decide between the Milibands but eventually went for Ed after the intervention of Lord Mandelson in criticising the manifesto."

In a sign of the collapse of relations, one David Miliband ally said last night: "If David had won and Mandelson had phoned to congratulate him, he wouldn't have taken the call."

The row lifted the lid on bitter divisions in the New Labour camp over the failure to install David Miliband – long seen as Mr Blair's political heir – in the leader's chair. It also raised questions over whether Lord Mandelson's powers of manipulation, which helped elevate Tony Blair and the New Labour project into government, were finally on the wane.

In an attempt to draw a line under the highly charged events of Labour's conference, David Miliband yesterday wrote to supporters to explain his decision to quit frontline politics because he "genuinely feared distracting and destructive attempts would be made to find division where there is none to the detriment of the party's cause".

He pledged to campaign in next May's Scottish, Welsh and local elections, but also wanted to spend more time with his wife Louise and young sons. "I think I can best make a contribution to the election and success of the next Labour government under Ed's leadership by devoting myself to understanding better the new challenges and new ideas and figuring out how to put our values into practice."

In the complex single-transferable vote system that Labour uses to elect its leader, David Miliband was ahead in the first three rounds, but lost by just 1.3 per cent in the final round. If just six more MPs had put him ahead of his brother in their voting preferences, the former foreign secretary would have won the race to succeed Gordon Brown as leader.

On Thursday, Ed Miliband will learn who has been elected to his Shadow Cabinet, alongside deputy leader Harriet Harman, the new chief whip Rosie Winterton and leader in the Lords Baroness Royal. At least six of the 19 elected posts must go to women, with the new leader having to balance giving decent portfolios to those who supported his leadership campaign – notably Sadiq Khan, Hilary Benn and Peter Hain – with ensuring rivals and potential troublemakers, including Ed Balls, Alan Johnson and Andy Burnham, are also kept happy.