JOHN Prescott was in an irritable, irascible mood. He kept chuntering to himself about the inanity and the stupidity of dunderheaded journalists asking what he regarded as silly and trivial questions about the Mandelson circus.

That circus was being held in a big tent, flapping in a gale of media interest, 11 miles up the road in Hartlepool. But Mr Prescott and the mega-heavyweight Chancellor of the Exchequer, Gordon Brown, were at the Riverside Stadium in Middlesbrough to discuss the vital and fascinating subject of regeneration of the regions.

Yet all the insolent reporters wanted to ask Mr Prescott was whether or not Peter had told a porkie.

Eventually, after much goading, the Deputy Prime Minister snapped. C'mon if you think you're hard enough, he all but blurted at a BBC reporter who must have muttered something about Mr Prescott's wife under his breath. Ask me that damn fool question again and I'll give you an answer so straight that you'll never walk again, said the jowls on his face.

"Are you afraid that today's important announcements at the Riverside will be overshadowed by Peter Mandelson?" asked the BBC man.

Suddenly Mr Prescott's fury subsided. Mr Brown beside him turned on a beatific smile with teeth so white he must have scrubbed them with bleach. Angelically, Mr Prescott sang: "I am sure voters will concentrate on the strength of the economy, the four years of Labour success and what the next Labour government will do to build on that success."

The TV men turned off their cameras. Mr Brown turned off his smile. Mr Prescott went back to chuntering.

But, in that moment, it all became crystal clear. Somewhere in Hartlepool, Mr Mandelson was scrabbling about in the gutter, desperate to grasp a little personal dignity on the long road to rebuilding his career and his life.

Here at the Riverside, Mr Prescott and Mr Brown were setting about the second phase on their long road to rebuilding the regions and the country. Theirs was the power, the glory and the vision of the future; for poor Peter Mandelson, there was only a figleaf to hide his past embarrassments.

BEYOND drawing a contrast between the past and the future, the Riverside Stadium was chosen for yesterday's presentation because it is a gleaming chrome beacon of regeneration, although the only real jobs it has created are for Colombian and Croatian footballers and an ex-England manager. However, the frantic work of the riverside cranes on the Middlehaven site offers some hope for the future.

Middlesbrough was also chosen because of the impending Corus closure, and because it is in the North-East, the region which is at the front in demanding more devolved powers.

And devolution is what underpinned yesterday's announcement. "You will have to await our manifesto, but this is another step forward in decentralising power and giving people another say in their own lives," said Mr Prescott.

Devolution has become like a pass-the-parcel game at a children's party - only it has been going on so long that everyone has forgotten what the prize is at the centre. They can't remember if it is a big prize, with a North-East prime minister and an assembly of elected North-East representatives, or if it is a little prize of a small quango overseen by a few councillors.

They don't even know if they'll ever reach the prize at the centre. People might get so bored of the game that they'll walk away long before all the layers are unwrapped. And the Conservatives, of course, should they win the election, would stop the game altogether, confiscate the parcel and hand whatever treasures lie inside it to local authorities.

But for the foreseeable future, Labour is calling the tune and yesterday the music stopped long enough for another layer of the parcel to be torn away. The sweeties that fell out included greater flexibility for the regional development agencies (RDAs) and greater powers for the North-East Regional Assembly.

In the past, the RDAs, One NorthEast and Yorkshire Forward, have received funding from 11 Government departments. Education money came to improve training; environment money came to clean up brownfield sites; trade money came to create jobs.

"It stopped us taking a holistic approach to the whole area," said One NorthEast's chief executive Mike Collier. "For example, Tees Valley's economic issue isn't simply there not being enough businesses or education or skills or investment - it is a combination of all those things."

The announcement yesterday means that, in future, the RDAs will be given one big pot of money and will have the freedom to spend it as they wish - as long as, in spending it, they hit the Government's 11 targets concerning job creation, cleaning up brownfield sites, increasing skills, regenerating market towns.

To ensure they do spend the money more appropriately, the North-East Regional Assembly - a collection of councillors and businessmen - will be able to scrutinise them more closely with the help of an extra £m announced yesterday.

Should the pass-the-parcel game go on long enough for the next layer to be ripped off, the sweeties revealed will probably include a referendum to decide whether the people of the North-East want a properly-elected regional assembly with greater powers still.

The high profile of the players at yesterday's meeting - Mr Prescott and Mr Brown were augmented by three other ministers including North West Durham MP Hilary Armstrong - suggests that the game will go on long into a second Labour term.

YET even as John Prescott and Gordon Brown left the Riverside, neatly side-stepping the question of reforming the Barnett formula on their way out, there was another out-break of hilarity emanating from Hartlepool.

Sir Malcolm Rifkind, the Scottish Tory president, was telling a rally in Edinburgh that Peter Mandelson had managed to fax his hand-written candidate information form for the forthcoming election, not to Labour headquarters, but to Mr Rifkind's office.

''Some people have a lot of ill-luck in life," said the former Cabinet minister, revelling in another's downfall.

''It's a document which invites candidates to update information contained on their entry for the 1997 election. In the column marked political career, Mr Mandelson has referred to his three ministerial appointments, but of course we know he suffers sometimes from a lack of memory. He has referred to his three ministerial appointments, but not his two ministerial resignations."

Poor Mr Mandelson - his life is at such a low ebb he can no longer walk into a church without tripping over a camera crew, he can no longer open a newspaper without reading of a psychologist who reckons he's a suicide risk, and he can no longer dial a telephone number without mishap.

And, even though innocent, he can no longer expect a return to the big time. The Hammond Inquiry was set up to discover the truth behind the Hindujas' passports and, in the light of its findings, Mr Mandelson has every reason to feel bitter about the way his best friend, Tony Blair, dismissed him.

However, ministers don't resign simply because they are caught up in questionable affairs. They resign because they lose the faith of the people, the media and, most importantly, the Prime Minister.

He lost the faith of the people twice because, although he did nothing wrong, both incidents looked wrong. First time round, he was in charge of a department investigating the company of a businessman who had lent him a considerable sum to buy a luxurious flat. Second time round, he had taken a considerable sum to keep his Dome afloat and then played a role in getting the donor a passport.

He lost the faith of the media because he had manipulated them so much, because he was the architect of the Dome, because he was the Government's most enthusiastic European and, probably, because he was gay.

All of which caused the Prime Minister to conclude that he was a liability in whom he could have little faith and who, in the interests of decisive government, had to go.

Although Mr Blair yesterday offered him a few warm words of friendship, it was clear that this was "a personal tragedy for Peter". Mr Mandelson was out on his own, rebuilding his own roots in Hartlepool, restarting his own career as a backbencher, finding his own way back to the big time.

But the Labour Party was at pains to suggest it had moved on from its past problems, as John Prescott and Gordon Brown showed as they outlined the future down by the Riverside.