Peter Mandelson will be cleared of the charge of lying when the report from Sir Anthony Hammond is published.

The report, which may be published as early as today, will say that the former Northern Ireland secretary did not "deliberately mislead" the prime minister but will suggest that questions remain about his conduct in relation to the Hinduja affair.

However the BBC has claimed that Mandelson did "lie" over his relationship with the Hindujas.

Mandelson is understood to be ready to demand a public apology from Jack Straw should the Hammond report find in his favour. Such a move would put pressure on Tony Blair who is accused of making a "panicked" decision to demand Mandelson's resignation.