Key Blair Ally Resigns Under Cloud

By Patrick Goodenough | July 7, 2008 | 8:09 PM EDT

London ( - British Prime Minister Tony Blair suffered a severe political blow Wednesday afternoon when he was forced to accept the resignation from the cabinet of one of his closest allies, Northern Ireland Minister Peter Mandelson.

Mandelson, who was tipped as a possible Foreign Secretary in the next Labor government, took the step under growing pressure over allegations of inappropriate behavior.

He had been summoned to Blair's office at 10 Downing Street to "establish the facts" about claims that have made media headlines over the past four days.

It is alleged that, in his previous capacity as minister responsible for the Millennium Dome - the ill-fated London visitor attraction that shut its door on December 31 after huge losses - Mandelson had helped secure British citizenship for a wealthy Indian businessman, in return for a one million pound ($1.46 million) donation to the Dome project.

Mandelson originally denied playing any role in Srichand Hinduja's application for a British passport, and Blair's office said his private secretary had made a telephone call in this regard.

Then the story changed; Downing Street said Mandelson had in fact himself phoned a government minister to discuss the application.

Mandelson denies impropriety, saying he had merely passed on a query about citizenship to the relevant minister, and that there was no link between that action and Hinduja's donation.

"I have not sought to influence a decision on naturalization in any way at all, merely to pass on a request for information," he said outside Blair's office after resigning, adding, "The prime minister is entirely satisfied with this."

He also had a message for the assembled media representatives: "As a reading of today's newspapers shows all too graphically, there must be more to politics than the constant media pressure and exposure that has dogged me over the past five or so years."

Mandelson is generally described as one of the most important contributors to Labor's comeback and 1997 election victory.

But his influence in the upper echelons of the party has made him few friends, even among Labor lawmakers.

He was forced to resign once before, as Trade and Industry Minister in 1998, after it emerged he failed to disclose the fact he had received a loan to buy a London house from a fellow minister.

His second resignation, just months before an expected general election, may spell the end of his political career, commentators said.

Patrick Goodenough
Patrick Goodenough
Spencer Journalism Fellow