Scandal brings down UK minister


Mandelson has resigned from the Blair government for the second time in just over two years

LONDON, England (CNN) -- Peter Mandelson has resigned as a senior minister in the British Government for the second time in 25 months.

He quit his high-profile post as Northern Ireland Secretary on Wednesday following intense press speculation over his involvement in a "cash for passports" furore.

After days of confusion over the extent of his personal interest in the UK naturalisation ambition of the Indian tycoon Srichand Hinduja, Mandelson was called to a meeting with Prime Minister Tony Blair in which he was forced to retract earlier statements that he had played no role in a passport application.

The issue became a political hot-potato after it was revealed that in 1998 the foundation run by Hinduja and his brothers, Gopichand and Prakash, gave Ł1 million to the Millennium Dome's Faith Zone.

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At the time Mandelson was the minister in charge of the Dome project. His opponents accuse him of pulling strings for the Hinduja passport application -- allegations he strenuously denies.

All three brothers are in India where they face questions over corruption allegations.

Mandelson told reporters after being summoned to a meeting with Blair: "I am today resigning from the government and wish to set out the background to my decision.

"I do not accept in any way that I have acted improperly in respect of any application for naturalisation as a British citizen."

Blair told the House of Commons: "I accept that the reply of the Northern Ireland Secretary through his office to inquiries from a newspaper at the weekend was misleading and resulted in the House of Commons and the lobby being misled -- and I accepted his resignation on that basis."

Robin Oakley, CNN.com's European Political Editor, said the Mandelson resignation will be "a massive blow to Tony Blair," coming as it does just months before a General Election.

He said: "Peter Mandelson has long been one of the British Prime Minister's key strategic thinkers in terms of pitching Labour's appeal to the electorate."

He added: "With matters in Northern Ireland at a very sensitive stage, the last thing Tony Blair wants is to be having to change his Secretary of State there."

Blair's office announced on Wednesday evening that Mandelson's successor would be Scottish Secretary Dr John Reid, with energy minister Helen Liddell taking over in Scotland.

In December 1998 Mandelson was forced to resign as Trade and Industry Secretary after it was revealed he had failed to disclose a home loan of more than Ł373,000 from fellow Labour MP and Paymaster General Geoffrey Robinson.

The second downfall of Mandelson came after he told both The Observer Sunday newspaper and 10 Downing Street that he had merely asked his private office to handle queries relating to the Srichand Hinduja passport application.


Mandelson's resignation came in the wake of widespread media coverage of the passports issue

He later had to concede he himself had telephoned Home Office minister Mike O'Brien on the subject and Blair's official spokesman was forced to admit Mandelson had made a telephone call about Hinduja's application.

Srichand and Gopichand Hinduja first applied for British passports in 1990 but were turned down a year later.

However, Gopichand Hinduia reapplied for and was granted a passport in 1997, by which time the brothers had approached the Millennium Commission about a centre promoting inter-faith understanding.

In May 1997, Mandelson was given responsibility for the Dome by Blair. Less than a year later, he rang O'Brien about a passport application by Srichand Hinduja which was eventually granted in March last year.

Mandelson told reporters: "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 added: "As a result of that, wrong information was given to the House. I accept responsibility for that.

"I would ask people to understand that my sole desire and motivation throughout was to emphasise that I had not sought to influence the decision on naturalisation in any way at all, merely to pass on a request for information and the prime minister is entirely satisfied with this.

"I confess in reaching my decision that there is another factor. 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 for the last five or so years."

He said he wanted "to lead a more normal life, both in politics and, in the future, outside."

Tory leader William Hague mocked Blair over the affair, accusing him of a "monumental error of judgment" in allowing Mandelson back into high office after his previous resignation.

His departure from the post and from government sparked mixed reactions, not least in Northern Ireland.

Ulster Unionist leader David Trimble paid tribute Mandelson, saying he wanted to thank him "for all the work done in Northern Ireland over the last year or so -- many people appreciate the efforts you have made."

Sinn Fein President Gerry Adams said: "It is a matter of public record that Peter Mandelson and Sinn Fein were in disagreement over many issues. Notwithstanding that, I wish him well for the future."