The BBC's John Pienaar: "Peter Mandelson's political rehabilitation has begun"

The Britannia had been investigating whether the former trade secretary broke any rules when he filled in his mortgage application.

Mr Mandelson, who resigned from the government over the affair, took a £150,000 mortgage from the building society after receiving a loan of £373,000 from the former Paymaster General, Geoffrey Robinson.

Peter Mandelson: "I'm very pleased"

The building society announced on Friday it would not take the issue any further and the matter will not be referred to the police.

Mr Mandelson said, in a statement, he was "delighted" he had been given a "clean bill of health" by the building society.

The former Cabinet minister said the "intense speculation" about whether he had broken building society rules had contributed to the pressure on him to resign.

He said: "It is behind me now and I just want to get on with rebuilding my life and career."

The inquiry was prompted by concerns Mr Mandelson may have misled the society when applying for the mortgage on his home in Notting Hill, London, by failing to disclose details of the loan from Mr Robinson.

In his statement, Mr Mandelson said at no stage had he intended to mislead the building society or withhold information.

BBC Political correspondent John Pienaar: Mr Mandelson was quick to pass on his good news

He said: "I have explained that throughout, my mortgage was not prejudiced by any other private arrangement to pay the balance of the purchase price.

"When I filled in the application form those other arrangements were not yet clear, but in whatever way it was to be finalised, the building society's interests were never jeopardised.

Mr Mandelson borrowed £373,000 to buy his London home

"Britannia have accepted this. They have made extensive inquiries and spent a great deal of time making sure everything is clear and above board and I respect their professionalism."

In a statement, the society's chief executive John Heaps said Mr Mandelson had written to the society.

He added: "Mr Mandelson has written to the society clarifying his present personal financial position.

John Pienaar: Peter Mandelson is in the clear

"We responded as we would in any case where a member brought new information to our attention, reviewing the mortgage arrangement in accordance with our normal procedures, and there have been no special courtesies extended to Mr Mandelson.

"Having completed this review, I am satisfied that the information given to us at the time of the mortgage application was accurate."

The statement concluded: "Having regard to all the circumstances, I have therefore decided not to pursue the matter further with Mr Mandelson."

The low-interest loan from Mr Robinson to his colleague was revealed before Christmas. Both Mr Mandelson and Mr Robinson resigned within hours of each other on 23 December.

'Unanswered questions'

The affair claimed a third scalp earlier this week with the decision by Chancellor Gordon Brown's press secretary Charlie Whelan to resign. Although many believed he had behind the revelations about the loan, he denied leaking the story.

Emma Udwin: Mr Mandelson has all but admitted that he didn't mention the Robinson loan

The former minister would have been required to give Britannia details of all loan agreements when he applied for the mortgage.

Questioned at the time of his resignation, Mr Mandelson said he could not remember exactly what he had put on the application form.

Michael Ancram: If everything has been above board, why were there so many resignations

Tory party chairman Michael Ancram told BBC Radio 4's The World At One "many unanswered questions remain".

He said: "The real question is if all this was perfect and above board, why did these resignations take place."