GORDON Brown's strength of character and policy decisions make him the best man to be Prime Minister, according to one of his most powerful allies.

Business secretary Lord Mandelson told the Harrow Times he believed Labour's economy policies during the global recession would be a strong factor for voters at the next General Election.

He said: “The Government is being tested by events at the moment. When the election comes, I believe we will be judged by the results of our economic policies.

“The Prime Minister has taken bold decisions. He went first ahead of other EU leaders. He went alone and showed even greater strength of character and leadership.

“I believed he and the Government will be vindicated by the actions taken.”

Lord Mandelson, who was handed the title of first secretary of state during the recent reshuffle, has been widely acknowledged as Mr Brown's right-hand man in the cabinet.

Speaking to the Harrow Times last night ahead of a Labour Party meeting organised by Harrow West MP, Gareth Thomas, Lord Mandelson said he “would not lose any sleep” over potential leadership challenges within the Labour Party.

He said: “There are a handful of MPs who will never be reconciled to Gordon Brown.

“I think Gordon Brown's grasp of policy decisions and strength of character makes him better than others to be Prime Minister.”

Lord Mandelson said the disastrous results for the Labour party in the recent local and European elections was a combination of the economic situation and the expenses scandal engulfing Parliament.

He said: “I think the crisis in the banking system and the global recession that has followed has shaken people's confidence.

“And I think the anger people are feeling in the furore about MPs allowances has hit the Government harder than other parties.

“People say, 'They are in charge, they must take the greatest responsibility'. Whether it is fair or unfair, we have to get through the recession.”

However, he stopped short of predicting a result at the General Election, which must be held during the next 11 months, saying: "People understandably will be unsure and that will make their political suipport more volatile than at other times."

Lord Mandelson said the message he was delivering to the party faithful last night in the austere surroundings of Grim's Dyke Hotel, in Old Redding, was a commitment to investing in business skills to make sure Britain got “a good share” of the eventual growth of the world economy.

As he oversees his new super-ministry, with the 34-word title Baron Mandelson, of Foy in the County of Herefordshire and Hartlepool in the County of Durham, Secretary of State for Business, Innovation and Skills, First Secretary of State and Lord President of the Council, he says he is “hopeful but not optimistic” about the economy.

He insisted investment in infrastructure and public services was the way to help people through the current downturn.