Former Prime Minister Tony Blair is to recommend his close political ally Peter Mandelson for a peerage.

Traditionally a departing PM draws up a resignation honours list, though for the first time the names put forward for the House of Lords will be scrutinised by the appointments commission.

It is thought Mr Blair will only nominate a few people to the Lords because of the ongoing ‘cash for peerages’ criminal investigation.

Mr Mandelson, who is the EU Trade Commissioner, was one of the most powerful figures in the formation of New Labour under Neil Kinnock, John Smith and Tony Blair.

There is an EU Commissioner from every member state. Mr Mandelson has been the UK’s man in Brussels since November 2004.

He has very poor relations with new Prime Minister Gordon Brown.

Mr Mandelson backed Mr Blair over his then-close friend Mr Brown for the leadership of the Labour party in 1994.

Mr Brown is said to have nurtured a grudge against Mr Mandelson ever since.

A source close to Mr Mandelson told The Mirror:

“It will be like an honorary title and he won’t get involved in the day-today workings of the House of Lords. He wouldn’t want to anyway.

“But I’d expect him to make an appearance when things get spicy. I don’t doubt it will be controversial.”

Mr Mandelson told BBC Radio 4 in March that he intends to stay in Brussels until the end of his term in office, regardless of Gordon Brown.

“I don’t know whether this is going to come as a disappointment to him, but he can’t actually fire me.

“So like it or not, I’m afraid he will have to accept me as Commissioner until November 2009.

“But I will not be seeking a nomination for a further term after that time.” It is thought that he will not take his seat in the Lords until after he has left his EU role.

Mr Mandelson has had a colourful political career. One of the architects of New Labour, he became arguably Tony Blair’s closest adviser.

When Labour came to power in 1997, he was rewarded with the job of “co-ordinating the government,” in which he antagonised many more senior figures.

He was appointed to the Cabinet twice, but had to resign both times.

He was famously outed on national television by gay journalist Matthew Parris.

The press then took to reporting on his personal life with his Brazilian boyfriend, Reinaldo Avila da Silva.