The cabinet moved to silence Peter Mandelson on Sunday, with Jack Straw stressing that there was no doubt the former Northern Ireland secretary had "told an untruth".

It also emerged that it was Straw who alerted Downing Street to the discrepancy in Mandelson's account of his involvement with the "passports for cash" scandal.

Alastair Campbell yesterday denied that he had used smear tactics against the former Northern Ireland secretary.

Whilst Downing Street had hoped to have buried the issue by now, the weekend interventions have enflamed the issue, prompting the Mirror to claim it as "Blair's worst crisis".