When Peter Mandelson was packed off to Brussels in 2004 as EU Trade Commissioner, The Herald, along with the rest of the commentariat, concluded: �There is no way back into government for him now�.

When Peter Mandelson was packed off to Brussels in 2004 as EU Trade Commissioner, The Herald, along with the rest of the commentariat, concluded: "There is no way back into government for him now". After all, here was a man who had been forced to resign from the cabinet not once but twice. He had first quit the Department of Trade and Industry, over a loan for his London home involving Geoffrey Robinson, then Paymaster General. Having returned as Northern Ireland Secretary, he was forced out again in 2001 over facilitating the passport applications of the Hinduja brothers, though he was cleared in the subsequent inquiry.

Nobody could have predicted that Mr Mandelson would be standing in Downing Street yesterday wearing a pink jumper and Cheshire Cat smile, and talking about being "third time lucky", especially when the man who had just invited him back into government as Business Minister was Gordon Brown. It was widely assumed they loathed one another.

Stroke of brilliance or act of folly? A sign of confidence or desperation? If it is true that the tough get going when the going gets tough, this is an astute move. When the ship is sailing through stormy waters and the rocks are near, an experienced helmsman is a vital asset. Only yesterday, in a newspaper article, Mr Mandelson was calling for a new era of global economic governance. With an intimate knowledge of global economic systems and an unrivalled contacts book, he is ideally placed to frame it.

Despite personal indiscretions, he has remarkable presentational skill, an area where the Brown administration has failed badly. Would Peter Mandelson have committed the 10p tax gaffe? No. He was also a highly effective minister, respected by civil servants.

With six key cabinet posts unchanged and Margaret Beckett and Geoff Hoon coming back alongside Mr Mandelson, opponents quickly dubbed this "the comeback cabinet", but in tough times, experience counts and, like it or not, this is the ground on which Labour will have to fight the next General Election, against a Tory party promising Obama-style change. Also, by bringing the arch-Blairite back to the cabinet, Mr Brown effectively lashes to the mast of his storm-tossed ship any Labour rebels considering mutiny. He may even have calculated that Mr Mandelson will draw some of the media fire previously directed at him. It is a high-risk strategy. Many continue to question Mr Mandelson on issues of probity and if there is a split in the cabinet, his presence could prove profoundly destabilising.

Other changes are welcome, particularly the creation of a department devoted to energy and climate change. Formerly split between the business and environment departments, the issue of Britain meeting carbon-emissions targets has too often fallen between two stools. Brave words generated insufficient action, while business-friendly civil servants blocked progress on renewable energy. Ed Miliband, heading the new department, could begin by cancelling any new coal-fired power stations until clean coal technology is available.

The appointment of Jim Murphy as Scottish Secretary disarms critics who complained that combining the job with defence, as Des Browne did, was an insult to Scotland. But Mr Browne was a big hitter and Mr Murphy, an able and respected parliamentarian, will need to be light on his feet if he is to take on the SNP in the run-up to a referendum on independence.