Peter Mandelson has been nominated by Prime Minister Tony Blaire as Britain's next European Commissioner.

The announcement was made after Mr Blair spoke to new European Commission President Jose Manuel Durao Barroso on Friday morning.

It will also trigger a by-election in his Hartlepool seat.

The appointment represents a remarkable comeback for Mr Mandelson, who has twice resigned from the Cabinet in controversial circumstances.

In a statement Mr Mandelson said he was "delighted" to have been nominated for the post by the prime minister.

"It is a great honour as well as a huge challenge and I will give it my all," he said.

Conservative co-chairman Liam Fox told Sky News the appointment showed "New Labour will look after themselves first and foremost".