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October 11, 1999
Web posted at: 6:38 p.m. EDT (2238 GMT)

LONDON (CNN) -- British Prime Minister Tony Blair chose a close ally to give fresh momentum to Northern Ireland's struggling peace process Monday, part of his first significant Cabinet shuffle since coming to power two years ago.

Blair tapped Peter Mandelson -- a former minister who resigned last year after it was revealed he had failed to declare a large loan from a multimillionaire colleague -- to replace Mo Mowlam as Northern Ireland Secretary.

The appointment of Mandelson, among five changes in the 22-member Cabinet, marked the swift rehabilitation of one of the nation's most prominent politicians.

"I only hope that my own appointment by the prime minister today will demonstrate the government's absolutely unwavering commitment to finding peace and reaching a deal in Northern Ireland," said Mandelson, 45.

Mandelson's accession was broadly welcomed by Northern Ireland's majority Unionist politicians, whose relations with the blunt-speaking Mowlam were frosty.

"I look forward to working with him," said Ulster Unionist leader David Trimble.

But the response from the Irish Republican Army's political ally Sinn Fein was more cautious.

Sinn Fein leader Gerry Adams said he ask for an urgent meeting with Mandelson. "It is crucial that (Mandelson) implements the British government's policy -- which is the Good Friday agreement and that he resists Unionist attempts to rewrite, reinterpret or renegotiate the agreement," he said.

Implementation of the 1998 Good Friday accord -- which calls for establishing a joint Catholic-Protestant government -- has stalled with Unionists refusing to enter the new administration until IRA guerrillas begin disarming.

Mandelson, one of Labor's most creative minds and a modernizer on the right-wing of the party, is seen by Blair as the best candidate to revive the agreement because of his negotiating talents.

"There is nothing more important than finding a deal that is acceptable to everyone, that will serve everyone and give everyone the chance they want in Northern Ireland," Mandelson said Monday.

In Dublin, Irish Prime Minister Bertie Ahern, who teamed up with Blair to produce the accord, praised the outgoing Mowlam, saying she had shown "great courage and understanding."

"There is never an easy time to go," Mowlam told reporters, standing alongside Mandelson after meeting Blair at the prime minister's 10 Downing Street office. "Now is clearly not an easy time."

Mowlam, 50, will now take over as minister for the Cabinet Office, overseeing implementation of key aspects of government policy. Her predecessor, Jack Cunningham, resigned, saying he wanted to go.

In other Cabinet changes, Geoff Hoon, a relatively unknown lawyer who previously served as the Labor Party government's Minister for Europe, will succeed Defense Secretary George Robertson, who is leaving to become NATO secretary-general.

Rising star Alan Milburn moved from the Treasury to take over Health after the resignation of Frank Dobson, who is running for mayor of London.

Milburn's job went to another Cabinet newcomer, Andrew Smith, formerly an employment minister.

The shuffle was the first major Cabinet change since Labor won a landslide election victory over the Conservatives in May 1997.

The urbane Mandelson, who epitomizes New Labor, was key to masterminding Labor's victory.

But his career was abruptly interrupted when newspapers discovered that he had failed to disclose a $615,500 loan from Paymaster General Geoffrey Robinson, whose business affairs Mandelson's department of trade and industry was investigating. Robinson's official duties included cracking down on tax evaders. Both men were legislators, as are all Cabinet appointees.

Mandelson used the money to buy a house in London's fashionable Notting Hill district.

Robinson also resigned, and Mandelson later sold the house profitably to repay Robinson.

Correspondent Nic Robertson, The Associated Press and Reuters contributed to this report.

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