"I don't think what he told me was any different from what he's been telling anyone who's been having dinner with him in recent months."
Mr Mandelson told Sky News he had met Mr Osborne "completely by chance" in a Greek restaurant but had not criticised the prime minister.
Chancellor Alistair Darling defended Mr Mandelson's appointment, saying it strengthened the government at a difficult time.
"People tend to get into a lather on this subject really quite unnecessarily," he told the BBC.
Mr Mandelson, an EU trade commissioner since 2004, said he was surprised but "proud" when his new role was announced on Friday.
His return has not been welcomed by some backbenchers on Labour's left, with one describing him as the most "divisive" figure in the party's recent history.
Mr Mandelson resigned from cabinet posts under Tony Blair's leadership - once over a loan from ministerial colleague Geoffrey Robinson and once over allegations of misconduct regarding a passport application for the Hinduja brothers.
He was later cleared of any wrongdoing.
Mr Brown is due to confirm further ministerial changes later, but Leader of the Commons Harriet Harman did reveal that Development Secretary Douglas Alexander would be election co-ordinator.
In the most recent changes announced, Shahid Malik was named a justice minister while Jon Trickett becomes Gordon Brown's parliamentary private secretary.
The BBC's political correspondent Jo Coburn said the latter move would "go some way to placating those on the left of the party".
The reshuffle could force Mr Cameron to follow suit, as he will need to appoint someone to shadow the new Department for Energy and Climate Change, led by Ed Miliband.
Meanwhile, a poll carried out in marginal constituencies before the reshuffle suggests the Tory leader is heading for victory.
The survey by ICM for the News of the World estimates Labour could lose 164 seats, giving the Tories a 78-seat majority.
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