Gerri Peev: Yes, he was trying to protect someone – but it wasn't Mandy

Published on Thursday 23 October 2008 22:37

PETER Mandelson reportedly once shouted down the phone at Gordon Brown: "I love you, but I can destroy you."

That is exactly the message Nathaniel Rothschild, heir to the banking dynasty, sent to George Osborne, the shadow chancellor and heir to the soft furnishing and wallcoverings empire.

In a letter to the Times, Mr Rothschild dropped his (possibly former) mate in it, telling the world Mr Osborne had been on his yacht with a Russian oligarch and discussing donations to the Tory party.

According to Mr Rothschild, he had to go public to teach Mr Osborne some manners.

For the top Tory had revealed details about the private party on his yacht, blabbing that Lord Mandelson had been there, "dripping pure poison" about Gordon Brown, shortly before he had been taken back into the government as Business Secretary. But how much of the row is really about the breach of protocol and privilege? Quite a lot, actually.

However, it is probably not Lord Mandelson that Mr Rothschild was seeking to protect, but Oleg Deripaska.

There are several theories doing the rounds at Westminster. The most common is that the story about Mr Osborne came out as part of an ingenious plot by Lord Mandelson. The man is feared and admired in equal measure for his ability to spin and stab his enemies in the front and back simultaneously.

Even one of his more recent victims is grudgingly jealous of his abilities to stitch up anyone who gets in the way.

But not for the first time, the political class has overestimated its potency and underestimated the power of money.

For the real relationship that has been betrayed is not that between Mr Rothschild and his Westminster chum, Mr Osborne, but that between Mr Rothschild and Mr Deripaska, for whom he works.

No-one would want to upset the (market] sensitivities of an almighty aluminium baron. Little wonder that the old Oxford pals – Mr Rothschild and Mr Osborne – have quietly declared a truce.

This is one court battle that could have endangered the survival of both men.