The resignation of Peter Mandelson may have proved a blow to the prime minister but it has strengthened the hand of Gordon Brown, the UK chancellor of the exchequer.

The abrupt departure of Mr Mandelson, former Northern Ireland secretary and close confidant of Mr Blair, has helped Mr Brown in two ways.

Firstly, he will be able to play his pivotal role in election strategy without the presence of Mr Mandelson - who was in the past responsible for media relations.

Secondly, Mr Mandelson's loss will enable the chancellor to use his increased influence to direct the policy on the euro, and he may now press for a sixth test in addition to his five economic tests: that when Labour does call a referendum it should be confident of winning a comfortable majority.

This is a welcome twist in Mr Brown's political life: while known for his iron grip on the economy, he has fared less well in the political sphere.

At the beginning of the year, he was rebuked by the cross-party Treasury select committee for meddling too much in the work of other departments.

It came on the heels of a tough autumn. Mr Brown was criticised over the Bernie Eccelstone affair, when he was accused of not disclosing the size of the donation the Formula One racing supremo had given to the Labour party. This hit the headlines as his judgment over fuel tax policy and pensioners was called into question.

This spring, Mr Brown will deliver his fourth Budget. His economic record is well respected and his last Budget enhanced his reputation for being a speedy and competent chancellor.

One of his smartest moves on coming to office three years ago was to hand over to the Bank of England responsibility for setting interest rates. As a result any negative reaction to interest rises or falls can be deflected from the Treasury.

And with Mr Mandelson gone, the Brown-Blair marriage can now be repaired.

Four years ago, the 49-year-old politician agreed to stand down from running for prime minister in order to give Tony Blair a clear run for the top job. He still smarts from the move.

Officially Mr Brown and Mr Blair work in harmony but insiders say the prime minister tolerates the occasional outburst from the Scot simply because he cannot do without his brilliant performance as a chancellor.