The Prime Minister's official spokesman last night denied he had "knifed" Peter Mandelson by appearing to question the ex-minister's state of mind.

Alastair Campbell told reporters on Saturday that Mr Mandelson had been "curiously detached" over the Hinduja passport allegations.

The remarks were widely interpreted as an attempt to kill off the Hartlepool MP's political credibility, by implying that he had recently been losing his grip on events.

But Mr Campbell insisted yesterday that it was "absurd" to portray his discussion of Mr Mandelson's mood during the Hinduja crisis as an attack on his state of mind generally.

He said: "I do not deny saying the words attributed to me, but that has not prevented misrepresentation."

Mr Mandelson had proved there was no feud between them by attending a family party at his house on Saturday night, said Mr Campbell.

However, Conservative Party chairman Michael Ancram claimed Mr Campbell was "locked in open war" with Mr Mandelson in an "attempt to deflect attention away from Mr Blair's direct responsibility for the causes of this mess".

Mr Mandelson, who resigned as Northern Ireland Secretary on Wednesday, broke cover yesterday to signal his determination to clear his name and revive his political career.

But several leading Labour figures made clear there was no way back into the Cabinet for him.

Mr Mandelson used an article in The Sunday Times to declare that he did not believe he had lied over his involvement in the application of the billionaire Hinduja brothers for British passports.

He agreed to resign in a moment of weakness, but was now determined to "fight back" and prove that his "small mistake" did not merit the end of his career.

But International Development Secretary Clare Short said: "Peter Mandelson is over." She told the BBC's World this Weekend: "He went because he has got problems with the truth."

And Home Secretary Jack Straw told ITV's Dimbleby programme: "There is no doubt, by his own admission, that he told an untruth." But he stressed that the full facts would not be known until the completion of an inquiry by Sir Anthony Hammond, which he said ought to be published "within weeks" to avoid claims that the Government was putting the matter off until after the General Election.

On Friday, Mr Mandelson was given the full backing of his constituency party, following a meeting at his home in Hartlepool, to fight the next election.

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