PM defends reshuffle and calls for unity as MPs return after break

As MPs gathered for the first time since their three-month summer break, the Prime Minister was preparing to address the Parliamentary Labour Party with a rallying call for unity.

Some Left-wing MPs are furious about Mr Mandelson's return while others are worried that MPs behind the plot to oust Tony Blair have been promoted over the weekend.

A News of the World ICM poll of marginal seats yesterday put the Tories on 43 per cent, Labour on 34 per cent and the Lib Dems on 15 per cent - enough for a healthy 78-seat majority for David Cameron.

Tonight's party meeting was, until a few weeks ago, seen as a possible focus of rebellion from backbenchers unhappy with Mr Brown's leadership. But the Prime Minister feels that he has emerged from the conference season much stronger and Mr Mandelson's dramatic return has killed off chances of a putsch this year.

Mr Brown was poised to tell colleagues tonight that now is the time for the party to show "unity and determination" and to focus on the economy. He also wanted to set out his "road map" forward by building on themes from his conference speech, including public service reform and universal childcare.

The slogan of the newly-confident premier was "fighting for families and British business first".

Mr Mandelson admitted in an interview with the Financial Times today that he had consulted Mr Blair before finally accepting the offer of the post of Business Secretary.

"I left Downing Street and went to see Tony in his office. I told him what Gordon had put to me and he told me that Gordon had already mentioned it to him. He said it was a 'no brainer'," Mr Mandelson said.

He added that his return had been driven by a determination not to repeat Labour's mistakes after the 1929 Wall Street crash when his grandfather, Herbert Morrison, was in the Cabinet. "The crisis split the party down the middle. We lost power and were out of power for a generation. History is not going to repeat itself."

But Mr Mandelson's ability to attract controversy continued after it was claimed that he had briefed shadow Chancellor George Osborne about Mr Brown's failings this summer. The new Business Secretary confirmed that he had discussed colleagues with Mr Osborne, though he had his own warning for the Tories.

"I would no sooner talk in public about what he said to me about his colleagues as I hope he would about what I said about my colleagues. But I can assure that there is no poison being dripped anywhere," Mr Mandelson said. Schools Secretary Ed Balls has admitted that the return of the former European Union Trade Commissioner was a risk but insisted it could work. Mr Mandelson also revealed that former spin chief Alastair Campbell was being used increasingly by Mr Brown.

The Business Secretary said he was "more mature" since his last spell in British politics and had benefited from the lack of factions and personal rivalry in Brussels.

He praised Mr Brown for his summer transformation. "He came back not just with some modest weight loss but with a clearer ability to see the wood from the trees," he told the Financial Times.