Other reports yesterday suggested that the former Secretary of State for Trade and Industry might lead an all-party campaign to take Britain into the single currency. The group is currently headed by the media tycoon and Labour peer Lord Hollick, a friend and former adviser to Mr Mandelson at the DTI. Mr Mandelson, a keen pro-European, has told friends he would like to play a European role in future. Although the length of time Mr Mandelson has to spend in the political wilderness is likely to depend on developments over Mr Robinson's loan, he need not worry about meeting the mortgage payments on his Notting Hill house, according to corporate headhunters.A CV which includes remoulding the Labour Party, organising the Millennium Dome and holding one of the great offices of state means that global companies at the cutting edge of technology are likely to be queuing up to offer the former trade secretary directorships worth at least pounds 250,000 per year, with share options and a cornucopia of other perks."In the small time that he ran the Millennium Dome he turned it around from a scheme that was sliding away. One government adviser said on Wednesday afternoon: "It was Mad - mutually assured destruction.". PETER MANDELSON has not ruled out a swift return to the centre of the political stage, although reports that he might stand for election as mayor of London were scotched by his supporters yesterday.

The Brown camp says the Trade Secretary put out the story himself, to take the fire out of a hostile biography by Paul Routledge of the Mirror.Whatever the truth, the result was disastrous for both. Some Treasury officials became convinced that this letter, which was leaked to the press, was part of a Mandelson plot to stitch up Robinson. They let it be known that the Paymaster-General and the Chancellor were not best pleased with him.Mandelson's allies believe the details of the loan were deliberately leaked by the Treasury as a revenge strike - that Robinson was determined not to go down unless the flourishing career of the MP for Hartlepool was cut short too. The focus for this frustration was the launch of a DTI inquiry into Robinson's business affairs, confirmed by the new Secretary of State for Trade and Industry in a letter to the shadow chief secretary to the Treasury, David Heathcoat-Amory Relations between Mandelson and Robinson began to sour.

He told friends that he saw himself as the link-man between Tony Blair and Gordon Brown, drawing a diagram of himself at the centre of a triangle.However, the Paymaster-General soon became caught up in the crossfire between Mandelson's and Brown's offices. In fact, Robinson did not see himself as loyal to just one camp. His regular football-watching evenings at the Grosvenor House flat with the other three members of the "Gang of Four" - the Chancellor and his advisers Charlie Whelan and Ed Balls - confirmed this impression. Robinson's business background and close connections with Gordon Brown made him the perfect Paymaster-General - but if anybody had then known about the loan, questions might have been asked about his appointment.As Labour settled into government, everybody assumed that Robinson was primarily a Brown man.

When Labour got into power, he was one of the key advisers telling the new Prime Minister who to appoint to the Government. At that point there had been no revelations about an offshore trust, press allegations about business irregularities or news of a glamorous sugar mummy called Madame Bourgeois; these were to emerge over the coming months.The loan inevitably complicated matters for Mandelson. As they discussed the details, it became clear that Mandelson would not be content with a two-bedroom flat in Hammersmith; he wanted a pounds 475,000 house in Notting Hill and Robinson agreed to lend him pounds 373,000 at what was a very favourable rate.Mandelson accepted the loan. The MP for Hartlepool mentioned that he was having difficulty raising the money to buy a London house, and the MP for Coventry North West said he would be "happy to help". In the autumn of 1996 he invited Mandelson to dinner at his penthouse, rented from the Grosvenor House hotel, overlooking Hyde Park.