UPDATE: Brown turns to Mandelson as McBride and Carter stand aside

Peter Mandelson: returns to the government

David Singleton 03-Oct-08

New Labour strategy guru Peter Mandelson is returning to the government, while Gordon Brown's communications chiefs Damian McBride and Stephen Carter are both set to take new roles.

In a surprise move, Mandelson has been made business secretary, taking over from John Hutton. However, insiders said that Mandelson – one of the architects of New Labour – had mainly been brought in to the fold to provide strategic comms advice to Brown.

McBride, Brown's top media handler, is understood to be moving to another role but remaining at Downing Street. A Number Ten insider said: 'Gordon remains loyal to Damian.'

Meanwhile, Carter, Brown's chief of strategy, has been appointed minister for communications, technology and broadcasting in the House of Lords. The former Brunswick CEO has been given a peerage as part of the PM's reshuffle.

The news follows sustained criticism of Number Ten’s media operation. It also comes after months of stories about ‘turf wars’ at Downing Street between McBride and Brown’s new guard of advisers led by Carter.

Bell Pottinger Public Affairs chair Peter Bingle said of McBride’s move: ‘It was inevitable. [Conservative communications director Andy] Coulson has bettered him at every turn.’

McBride's replacement will be Justin Forsyth, a Number Ten veteran who has previously worked at Oxfam and has briefed the lobby in the past.

Recently, Brown has appeared keen to bring back former aides of ex-PM Tony Blair. Brown previously floated the idea Blair's former comms chief Alastair Campbell returning to Downing Street.

Derek Draper, a former adviser to Mandelson who has recently returned to work for the Labour party, said Mandelson would play a key strategic role.

'I think Peter will prove to be a pretty formidable secretary of state, a really brilliant contributor to the strategy of the government and the presentation of the government,’ he said.