It is absurd to have spent hundreds of thousands of pounds on a disgraced ex-minister, especially after the disaster of Stephen Byers

Iain Duncan Smith

The former Northern Ireland secretary has welcomed the second report saying it "fully cleared" his name.

But Conservative leader Iain Duncan Smith said that the inquiry had been a "complete waste of money".

Liberal Democrat MP Norman Baker said the investigation - which he described as "a whitewash whitewashing a whitewash" - left "as many unanswered questions as you'd find in a box of Trivial Pursuit".

And former Labour minister Peter Kilfoyle said: "I think it's an attempt to spin the situation to make it more palatable for Mr Mandelson to be given a non-governmental job."

Call remained 'likely'

Sir Anthony Hammond was persuaded to take a further look at the evidence surrounding the affair but he reached the same conclusion that the former Northern Ireland secretary behaved "properly".

It remained "likely", however, that Mr Mandelson had phoned the then Home Office minister Mike O'Brien about one of the Hinduja brothers' passport applications.

Mr O'Brien's recollection of events differed from Mr Mandelson's

A Downing Street spokesman said that Prime Minister Tony Blair welcomed the report adding that it underlined "again that there was no impropriety, no wrongdoing, no passports for favours".

The spokesman added that had the documents that Mr Mandelson made available for the second inquiry been released for the first then "the picture of events would have been far clearer and less open to misinterpretation, the sequence of events including the resignation may well have been different".

Mr Duncan Smith said: "It is absurd to have spent hundreds of thousands of pounds on a disgraced ex-minister, especially after the disaster of Stephen Byers.

"The prime minister should be concentrating on our public services, the NHS, transport and schools, instead of just trying to protect and hang on to his friends."

The Hammond inquiry was reopened earlier this year

Mr Mandelson said: "I welcome the statement from No 10 that the sequence of events including my resignation might well have been different if these newly-found documents had been available to the prime minister.

"If we had had them at the time of the controversy, things would have been handled better by all concerned, including myself."

But he added: "I am not owed an apology because nobody made a mistake."

Acted with 'propriety'

The row which caused Mr Mandelson to resign for a second time from the cabinet, centred on the passport applications of Srichand and Gopichand Hinduja - both donors to the Millennium Dome.

The original inquiry cleared Mr Mandelson of impropriety but said it was "likely" he had made the disputed phone call to home office minister Mike O'Brien.

His resignation from the Cabinet in January 2001 came before the completion of the original Hammond report last March, and was not a result of former Treasury solicitor Sir Anthony's conclusions.

There was widespread speculation that a report which cleared his name of any suspicion of improper behaviour might make a return to frontline politics possible for the Hartlepool MP.

Mr Mandelson, however, has subsequently said he does not want to return to the government.