The Confederation of British Industry (CBI) said: "While making no comment on the direct circumstances surrounding Peter Mandelson's resignation, the CBI regrets the departure of a minister who in the time he had been in the post had shown a clear sense of the key requirements for business success and a strong commitment to improving the competitiveness of British business."

Trade unions, who clashed recently with Peter Mandelson, seemed to shrug off any anger, expressing their disappointment at the Trade and Industry Secretary's resignation.

TUC John Monks: "He will be much missed."

Mr Mandelson infuriated unions by making 11th-hour changes to the Fairness at Work Bill which watered down proposals to give workers greater union recognition.

Nonetheless, the Trades Union Congress (TUC) expressed its disappointment. General Secretary John Monks said: "(Peter Mandelson's) departure is a personal tragedy and he will be much missed. The TUC now looks forward to working with Stephen Byers."

"Next year promises to be a historic year for trade unions with the Fairness at Work due in January and with new opportunities for social partnerships."

Although Mr Mandelson published details of the Fairness at Work Bill on the last day of Parliament last Thursday, the final shape of the legislation is still to be agreed.

Devil in the detail

Union leaders will want to meet Mr Mandelson's successor Stephen Byers early in the New Year to finalise crucial details of the Bill.

John Monks said he was looking forward to working with Stephen Byers in the "historic" year ahead for unions.

"The TUC now looks forward to working with Stephen Byers. Next year promises to be a historic one for trade unions with the Fairness at Work Bill and with new opportunities for social partnership."