Peter Mandelson's glittering political career yesterday collapsed in ignominy for the second and final time over an unnecessary act of deception - his fatal refusal to be frank with Tony Blair about his role in brokering a British passport for a £1 million sterling donor to the Millennium Dome.
In a day of high drama not equalled at Westminster since Mr Mandelson's resignation over his secret home loan in 1998, the man who helped craft New Labour's modernising image for 15 years stepped down as Northern Ireland secretary and renounced all strategic responsibility for the coming general election.
After a hostile overnight press both men almost certainly realised it was all over by the time Mr Mandelson and Mr Blair met in Downing Street at 10.45 a.m. yesterday - three hours before the fallen minister made an apologetic resignation statement in the street outside.
The Downing St spokesman, Alastair Campbell, refused to defend the Northern Ireland secretary when he briefed reporters. "The Prime Minister has got to face the House of Commons this afternoon, and there are a number of areas of fact he feels the need to pin down," he said. In an hour-long meeting in Downing Street, Mr Blair and his most trusted aide discussed why the media, Mr Campbell and fellow-ministers were all misled for 48 vital hours about Mr Mandelson's single phone call to Mr Mike O'Brien, the immigration minister, in June 1998.
Mr Mandelson insisted he had done nothing improper, but accepted he had not told the whole truth about his intervention in the application for naturalisation by wealthy businessman Mr Srichanda Hinduja.
After revelations in the Observer newspaper on Sunday, Mr Mandelson had insisted that he had merely asked his private office to pass on a request for information regarding a possible application from Mr Hinduja to the Home Office in June 1998. In fact he made the crucial two-minute phone call in person.
In the same month, the Hinduja brothers offered to sponsor the Dome's faith zone. Mr Mandelson, as Cabinet Office minister, was in charge of the Dome.
Mr Mandelson, who was out of office for 10 months after the Guardian's revelation of his £374,000 sterling mortgage loan from Geoffrey Robinson, is now entitled to his second ministerial pay-off of £12,129 sterling in just over two years.
Yesterday, insiders emphatically denied that Mr Campbell had threatened to resign if Mr Mandelson did not.
"If Tony ever had to choose between Peter and Alastair, Alastair would win. He is the long-distance runner, Peter the sprinter," one Labour veteran explained. Mr Campbell later confirmed that Mr Mandelson would not be taking part in Labour's general election campaign. "I think Peter's making clear from his statement that he is clearly looking to wind down his political activity," he said.
Mr Mandelson's exit leaves Chancellor Gordon Brown's position and influence over the Prime Minister much strengthened. Mr Brown and his close ally, Mr Douglas Alexander MP, will now be in complete charge at Millbank, the party's headquarters. Mr Mandelson had been responsible for the nuts-and-bolts planning of the election, including ensuring the party machine in the country was ready for the campaign. Last night there was even some doubt whether Mr Mandelson would stay on as MP for Hartlepool as the impact of the sudden crisis delighted Tory MPs and chilled all but the most die-hard Mandelson enemies on the Labour benches.
The former Downing Street press officer and long-time friend of Mr Mandelson, Mr Tim Allan, said the Hartlepool MP would think "long and hard" before dropping his constituency, and also insisted the ex-Northern Ireland Secretary would want to remain in public life.
Mr Mandelson's statement denied "acting improperly" over Mr Hinduja's passport bid, but admitted: "I do accept that when my office spoke to a Sunday newspaper at the weekend I should have been clear that it was me personally, not my officials, who spoke to a Home Office minister."
He also attacked the media, implicitly for its relentless vilification of his political role as a pro-European, pro-Lib-Lab moderate as well as for his private life. "I want to remove myself from the countless stories of controversy, feuds and division and all the rest. I want in other words to lead a more normal life, both in politics and, in the future, outside," he said.
In the Commons, Mr William Hague gleefully denounced the Prime Minister's "monumental error of judgment" in giving his old friend a second chance in 1999 - leaving Mr Blair loyally to defend the achievements of the flawed colleague who sat grim-faced at his side.
Few Tories believe their own election chances have been much improved. "William has 24 hours to make this stick to Blair," said one MP. The Tory leader did so by claiming Mr Mandelson had been "central to everything you have done" - from spin to smears on colleagues. Mr Charles Kennedy joined Mr Blair in saying it was Mr Hague who had demeaned himself.
Downing Street moved to replace Mr Mandelson at a crucial stage in the Northern Ireland peace process. The Prime Minister appointed a leading QC, former treasury counsel, Sir Anthony Hammond, to examine the way the Hinduja passport was eventually granted in March 1999 - although Mr Blair told MPs that he and Jack Straw are satisfied that it was properly done.
The former Tory immigration minister, Mr Charles Wardle, last night challenged Sir Anthony to establish whether Mr Hinduja's UK residence terms had been relaxed and why his application was fast-tracked a few months after his family foundation found £1 million sterling for the Dome's faith zone.
The Shadow home secretary, Ms Ann Widdecombe, wrote to the Home Secretary, Mr Jack Straw, last night urging him to make a Commons statement on the affair.