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Peter Mandelson is expected to be announced as UK ambassador to the United States while Sir Keir Starmer prepares for a Donald Trump presidency.
The prime minister is said to believe Lord Mandelson has the trade expertise and networking abilities to bolster the UK’s interests during a delicate period for relations with the US.
Lord Mandelson, 71, last served in government 14 years ago when Gordon Brown was prime minister.
The Labour grandee has long been seen as one of the leading candidates for the job. He will replace Dame Karen Pierce, whose service in Washington DC is expected to conclude in early 2025.
Lord Mandelson is often described as one of the key architects of New Labour. He was the Labour MP for Hartlepool from 1992 to 2004, during which time he served as secretary of state for Northern Ireland.
In 1998, Sir Tony fired the man who later served as business secretary for failing to disclose a home loan from a senior minister.
Soon after his return, he was forced to quit once more due to a passport scandal involving the billionaire businessmen, the Hinduja brothers. When he was elected to the Hartlepool seat in 2001, he famously declared that he was a “fighter not a quitter”.
He was later named Britain’s EU commissioner by Sir Tony.
Last month he risked infuriating Mr Trump after he suggested he could combine the job with another role. He said becoming the UK’s man in Washington was not “incompatible” with being the next chancellor of the University of Oxford.
He later lost that particular contest to William Hague but remained the frontrunner for the US role as the Labour government came under increasing pressure to woo the president-elect.
Relations between the two are strained, after Mr Trump’s election campaign team hit out at Labour and accused it of attempting to interfere in the election, in a row over UK activists helping the Democratic Party.
Sir Keir’s foreign secretary David Lammy has also tried to play down comments he made in the past in which he called Donald Trump a “neo-Nazi sympathising sociopath”.
When it comes to dealing with the Trump administration, Lord Mandelson has suggested that Britain has to “navigate our way through this and have, I’m afraid, the best of both worlds”.
“We have got to find a way to have our cake and eat it,” he said.
In November, he also told BBC One’s Sunday With Laura Kuenssberg that he was “more in favour of a new relationship rather than a special one” with the US. Pushed further on whether he would be interested in the Washington role, the former government minister said: “I would be very interested indeed in giving advice about trade to whoever is appointed.”
Weeks before Labour entered No 10 this summer, he resigned from the board of his lobbying firm, Global Counsel.
At the time his resignation prompted speculation he would be free for a possible government role.
Earlier this year he ruled out a return to frontline politics after the reported part-sale of Global Counsel to Barack Obama’s former polling guru, Jim Messina.
At the time Lord Mandelson, once dubbed the “Dark Lord” for his role as a New Labour spin doctor, told The Telegraph: “I will continue to always be a cheerleader and champion of a Labour government but I do not intend to be a member of it.”
In March he raised eyebrows when he told Sir Keir he could stand to “shed a few pounds, and that would be an improvement”.
The move appeared to be a bid at even-handedness after he hit out at the then-prime minister Rishi Sunak’s notorious slim-fit suits and skinny ties, saying they “diminish him rather than expand him” on his podcast How To Win An Election.
