Analysis: A 'massive blow' for Blair

By CNN.com European Political Editor Robin Oakley

LONDON, England (CNN) -- The resignation of Peter Mandelson is a massive blow to Tony Blair.

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 is one of those who with Blair and Chancellor of the Exchequer Gordon Brown was responsible for the reforging of the party as New Labour.

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

AUDIO

CNN's Robin Oakley: "A massive blow"

263K/47 sec.
AIFF or WAV sound

Tony Blair: "He has paid the penalty"

160K/14 sec.
AIFF or WAV sound

QUICKVOTE

Was UK minister Peter Mandelson right to resign?
Yes, his behaviour was unacceptable
No, he was important in the Northern Ireland peace process
View Results

Given that Mandelson and Brown were to be the chief architects of Labour's election campaign it is a massive embarrassment to Labour that a man who was to play such a key role -- it must be in some doubt now what if any role he will play -- should come under such a cloud.

If he is kept on in a key campaign role, Tories and Liberal Democrat opponents will be able to argue that a man twice involved in dishonesty or deception is still at the heart of the Labour campaign.

It is a huge blow to Blair because he had shown faith in Mandelson by restoring him to the government so soon after his downfall over the Ł370,000 house loan from former Paymaster-General Geoffrey Robinson.

Mandelson's departure also means that Blair's government has lost its strongest advocate of the single European currency.

It is very difficult to see how Mandelson can resurrect a political career after twice having to resign in disgrace.

It will obviously mean a long period in the wilderness before he can contemplate a return to front-line politics -- even if he should want to.