Mandelson acts swiftly to heal rift with Brown

Peter Mandelson, the highly influential Labour strategist and Tony Blair confidante, yesterday took urgent steps to minimise the damage caused by his personal tensions with Gordon Brown, the shadow Chancellor.

Mr Mandelson included in an agressively free-market speech to businessmen in London yesterday a glowing reference to Mr Brown as a future "steadfast and redoubtable Chancellor" who had already "shown his mettle when it comes to hard choices."

The Hartlepool MP and chairman of Labour's powerful election campaign team - accused privately by Brown allies for leaking information about problems in their professional relationship - lavished praise on Mr Brown in his speech at the Savoy Hotel, London.

He declared that Mr Brown was "someone who will never confuse the boldness we need in order to raise Britain's game and economic performance with the sort of cut and run irresponsibility being pressed on the current occupant of Number 11 Downing Street. "

Earlier, the tensions among Tony Blair's closest colleagues were publicly confirmed yesterday by Labour's former media and campaigns chief, who herself fell victim to the private feud between Mr Brown and Mr Mandelson.

Joy Johnson, who left her post in January, said the differences between the two were well known. "There are obviously differences. We read about it. We know there are differences," she told BBC Radio 4's The World at One programme.

Attention had been drawn to the ill-feeling between Mr Brown and Mr Mandelson, which dates back two years to the Labour leadership election after the death of John Smith, by a report in the Times.

The article prompted fierce recriminations in Westminster yesterday. A Brown loyalist suggested Mr Mandelson was in some way responsible, and contrasted Mr Brown's standing as shadow Chancellor with that of Mr Mandelson, "the new MP for Hartlepool".

Party officials sought to play down suggestions that Mr Brown and Mr Mandelson were not on speaking terms, saying that they met several times a week - most importantly at the daily planning meeting in Mr Brown's office every morning - and occupied virtually adjacent offices.

Ironically, Mr Mandelson's speech was made to the KMPG Businessman of the Year Awards. KPMG was the company revealed by the Independent as having advised clients in seminars on how to escape perceived threats from Labour's taxation plans. The company has since become persona grata in Labour circles after agreeing to halt such seminars.

Meanwhile, Mr Blair's office took steps to dampen down turbulence over weekend reports that Mr Blair had a rough ride from a series of meetings with backbenchers.

A statement signed by some of Mr Blair's reported critics, including Tony Banks (Newham North West), Ann Clwyd (Cynon Valley), David Hanson (Delyn), John Home Robertson (East Lothian), Ken Purchase (Wolverhampton North East) and Allan Rogers (Rhondda), declared: "The meetings were on Tony Blair's initiative. They have been universally welcomed in the PLP as an opportunity to discuss and consult on the direction of the party. "They were friendly, positive and constructive."

Andrew Marr, page 15