Back from running Britain from Corfu

LONDON - Lord Peter Mandelson's top priority will be to save thousands of Vauxhall jobs when he swaps his sun lounger for his ministerial desk, Downing Street said.

The First Secretary of State has returned to London after running the Whitehall machine from his luxurious Greek holiday hideaway in Corfu for three days.

His holiday companions included Lord Rothschild, the father of his financier friend Nat, David Geffen, the American film producer and record executive, and interior designer Nicky Haslam.

Officials have shrugged off accusations of chaos in the ministerial holiday rota by pointing out that he has been in constant touch by BlackBerry and mobile phone.

They insisted that Mandelson, who has been enjoying the hospitality of the Rothschild banking dynasty in a villa overlooking the Ionian Sea, had been unruffled by a furore in Britain over the way he has balanced work and play. "Peter rises above these things" one official said.

But the Conservatives claimed the unconventional arrangements in Prime Minister Gordon Brown's holiday absence presented problems over the handling of sensitive intelligence and defence matters.

Andrew Lansley, the shadow Health Secretary, told the BBC: "You can't send Peter Mandelson information about security issues on a BlackBerry to Corfu".

Mandelson will focus on the British Government's efforts to boost industry - car manufacturing in particular - and create jobs. Ministers believe they are inching towards a deal to secure the long-term future of Vauxhall, which employs 5000 workers in Luton and Ellesmere Port.

Two bidders are vying to buy Vauxhall's parent company, GM Europe, with the winner due to emerge within weeks. Mandelson is preparing to announce a cash injection into the firm in return for a promise to keep job losses to a minimum.

He will also trumpet the success of the car scrappage scheme whereby motorists have been offered £2000 ($5000) off the price of a new car - half coming from the taxpayer - if they trade in a vehicle more than 10 years old. With half the £300 million allocated to the initiative already spent, he will warn the scheme is likely to close by Christmas. Mandelson will respond to further grim news on unemployment - dole queues are set to pass 2.5 million in figures to be announced this week - by pointing to jobs initiatives in the pipeline.

Mandelson took charge after Deputy Prime Minister Harriet Harman left for Italy and will hand over to Alistair Darling, the Chancellor of the Exchequer, next week. Jack Straw, the Justice Secretary, will "mind the shop" for the final week before Brown's return.

- INDEPENDENT