When Peter Mandelson moved into the Department of Trade and Industry, it was widely seen as his first real test as a high-flying politician. Nobody doubted his skills with the media or his astuteness in reading politics. But the DTI was his first "real job" where he would have to make difficult decisions with economic and political consequences.

He billed himself as the voice of business to government. Before the election, Mr Mandelson had flagged his "New Labour" credentials, making little secret of his pro-business views or his lack of enthusiasm for Labour's links with the unions. He succeeded Margaret Beckett at the DTI, New Labour writ-large after a woman from the traditional Labour mould.

In his in-tray were a string of decisions which would test those views:

• whether to privatise any part of the Post Office, where selling a minority share was an option
• whether to intervene to protect the coal industry, which was in danger of extinction because of the growth of gas-fired power stations
• how to enact Labour's pledge to make employers deal with unions where employees wanted it
• a broad measure to make industry more competitive.

Mandelson: intervened over the coal industry

And on the coal industry, he did not quite deliver what a New Labour man might have been expected to, intervening to protect the coal industry by blocking the expansion of gas.

On the Competitiveness White Paper, all the modern sounding sentiments were there (much talk of science and information technology) but substantial new funds were not available because Mr Mandelson's purse strings were controlled by the Treasury.

On union law, he re-opened consideration of the "Fairness at Work" White Paper. The result of the fresh deliberation was a change of the law in favour of employers - the barriers for unions to get into firms would be higher than they were before Mr Mandelson's appointment to the DTI.

More than presentation

Only on "Fairness at Work" did Mr Mandelson live up to his billing. His critics say it is because he found himself in a job which was a lot harder than mere presentation. A fairer judgement though would be to say that he was a highly intelligent man who acts pragmatically. Partial privatisation of the Post Office, for example, was ruled out because of the political realities.

All the same, Mr Mandelson has refocused the DTI, giving it the kind of profile it had not enjoyed since it was in the charge of Michael Heseltine. He is a man Mr Mandelson admired and who has many of Mr Mandelson's skills and even grand, patrician demeanour.

Successor: Byers may remove threat of rivalry

The DTI has a small budget but a large role as promoter of British business so a bit of showmanship might not go amiss there, though Mr Mandelson decided not to follow Mr Heseltine in styling himself President of the Board of Trade.

Mr Mandelson's successor, Stephen Byers, is not quite the showman that either was at the DTI. He is, though, close to both in broad attitudes towards business.

His appointment does offer Labour one bit of relief. Mr Mandelson had been briefing journalists that he envisaged a greater role in economic policy-making for the DTI, all making for a potential conflict with the Treasury. Mr Mandelson and Gordon Brown's aide, Charlie Whelan, were at daggers drawn even before the current imbroglio.

In the 1960s, the Treasury and the newly-formed Department of Economic Affairs quickly built up a poisonous relationship, much to the cost of the government.

Mr Mandelson's departure, to be replaced by a Treasury man, may remove the threat of damaging rivalry.