With Miliband under intense pressure after a succession of business leaders criticised his policies as bad for the country, the former prime minister made clear that he was ready to aid Miliband’s push to restore Labour to power.
The Observer understands that talks between Labour officials and Blair’s office have been going on for weeks about the role he might play in the election campaign.
Asked whether the three-time election-winning Labour leader was prepared to throw his support behind the campaign, Blair’s office said that regarding “his involvement in the party’s election campaign, he will do whatever the party wants”.
While Blair’s presence in the campaign will inevitably be controversial, the declaration is a sign that the leading lights of New Labour are prepared to rally behind the current leader.
Labour sources say Blair would be ideally placed to counter recent bruising attacks on Miliband from some Tory-supporting entrepreneurs, by arguing that the Tories would do far more damage to British business if they opened the way for the UK to leave the EU.
David Cameron, whose party is under heavy pressure from Ukip, has promised to hold a referendum on EU membership by the end of 2017 if he is returned to Downing Street.
A majority of Tory cabinet ministers say they will back a British exit unless he can renegotiate terms of membership. Most business leaders, however, are strongly in favour of the UK staying in.
In a recent interview with the Economist, Blair suggested he had reservations about Miliband’s strategy, saying the election looked like becoming a battle between traditional leftwing and rightwing parties, with the right most likely to win. He later said he had not meant that Miliband was on course to lose.
But with his former spin doctor Alastair Campbell now heavily involved in preparing Miliband for TV debates, Blair will know he cannot be absent from the campaign without fuelling further damaging speculation.
Despite a bruising couple of weeks, during which two members of Blair’s cabinet – Alan Milburn and John Hutton – both raised questions about Miliband’s policies, Labour appears to be holding on to a narrow lead over the Tories.
The latest survey by Opinium for the Observer puts Labour on 34%, two points ahead of the Tories.
The former minister and Blair ally said Miliband would “make a very good prime minister” and was not anti-business. Mandelson also said that a newspaper claim that he had sounded out Alan Johnson as an alternative Labour leader last autumn was “complete rubbish”. Campbell, the other senior Labour figure quoted as having sounded out Johnson, has also denied the claim.
Mandelson told BBC Radio 4’s Today Programme that he had spoken to Johnson only because of speculation about him standing: “As a rather good friend of Alan Johnson, it would be rather strange if I didn’t phone him and find out what all this hype was about.
“I think I probably teased him a bit and suggested it was the publicity agent … whipping up media interest to boost sales of his book … But the rest of the story is complete rubbish.”
Over the past week, Labour has been under siege over its stance on business, after the boss of Boots said a Miliband premiership could be a “catastrophe”.
Mandelson accepted that more needed to be done to counter the impression being created, but said the criticism was a deliberate attempt to misrepresent the party’s position.
He said the greatest risk to business would come from a Tory party that offered a referendum on EU membership at which many Conservative MPs would campaign for a British exit. “The greatest risk for business in this country is that we have a Conservative-led government that unleashes the Tory party lemmings who are just determined to race over this cliff and take us out of Europe,” he said.
guardian.co.uk © Guardian News and Media Limited 2010