Mr Scargill plans to stand in Hartlepool as a candidate for the Socialist Labour Party, for which he is general secretary.

I am happy to debate the future of the left with him

Peter Mandelson

Mr Mandelson has a majority of more than 17,000 votes in the seat, but pundits are predicting his support is waning following his resignation as Northern Ireland secretary.

He was forced to quit last week amid a row over his involvement in Srichand Hinduja's passport application.

Mr Mandelson, who aides say is still out of the country, welcomed Mr Scargill's challenge in a statement issued by his parliamentary office.

Peter Mandelson: Hartlepool majority under threat

"This is the first good piece of news I have had for some while," Mr Mandelson said.

"Arthur Scargill is the man who destroyed the British coal industry single-handedly and betrayed every working man and woman in Britain in the process.

"I am happy to debate the future of the left with him and champion the achievements of the most successful Labour government in the party's history."

Euro opponent

But Mr Scargill said that the government's policies on the NHS, education and housing were "disastrous" and Mr Mandelson was an "unmitigated disaster".

He added that job cuts at steel company Corus would help highlight his fight against the market forces Mr Mandelson and New Labour had embraced.

"The mass destruction of the British coal industry is testament to the fact that I got it right and they got it wrong," he told the BBC Radio 4's PM programme.

Mr Scargill is also an outspoken opponent of the European Union and in particular the single currency.

He has described the European Commission as "unelected, unaccountable and openly corrupt" and believes signing up to the euro would increase poverty and unemployment.

Mr Scargill took the National Union of Miners through the 1984-1985 strike.

His party was set up in 1996 as a socialist alternative to New Labour and was partly inspired by Labour's decision to ditch its constitutional commitment to nationalisation, as outlined in clause 4.