“When, a couple of months later in October, Peter Mandelson was offered a peerage and brought back into the Cabinet as Business Secretary, Osborne began briefing journalists to the effect that Lord Mandelson, then a European commissioner, had spent his holiday dripping "pure poison" about Gordon Brown.”
But my understanding is that Osborne gave the briefing in the summer. Osborne called Daniel Finkelstein, a former colleague of his from Tory central office who was at the time comment editor of The Times, straight after dinner
The genius of the Sunday Times splash on October 5th was to realise that all the disobliging comments that Mandelson had made about Brown in private, many of which were common knowledge in Westminster, were now newsworthy. The story was not an Osborne plant.
However, when Mandelson denied the story, Finkelstein immediately blogged saying that he was sure it was true because he had spoken to ‘the top Tory’ concerned that night. Given how close Osborne and Finkelstein are, this made it appear that the whole thing was a coordinated attempt to destabilise Mandelson when it wasn’t. Indeed, certainly by Monday the 6th, Osborne was trying to shut down the story — refusing to talk even to sympathetic journalists about what Mandelson had said. Osborne realised that he wouldn’t come out of a fight with Mandelson without a fair few bruises, and so wanted to avoid one.
The Mandelson-Osborne story will run and run because Mandelson wants it to; it was Mandelson who decided to respond to Osborne’s Demos speech with a column full of personal barbs that were designed to get newspapers to write about Corfu again. He realises that he has already incurred so much reputational damage that the Corfu story can’t hurt him — hence him going back to the Rothschilds this year. By contrast, Osborne still has most of his political life ahead of him and aspirations to higher office. He doesn’t want the whole Corfu incident — which raised questions about his judgment — dredged up every few months. But if Mandelson has anything to do with it, it will be.
During the election campaign, expect Mandelson to repeatedly try and highlight the fact that he and his ‘old friend George’ are the two key strategists. Mandelson knows that journalists find this kind of process-driven, personality heavy story irresistible and that until the Tories win the election, the Mandelson-Osborne one will always be seen through the prism of Corfu.