Question: What do you hope to achieve at the Progressive Governance summit this weekend?

Peter Mandelson: We want to create a resurgence of progressive politics. The centre left in our view is winning the battle of ideas but we need to cement our thinking and our direction.

Question: Is this a re-launch of the Third Way?

Peter Mandelson: No, a regeneration of our thinking and renewal of ideas. Every political party and every government needs to do that, otherwise it becomes stale. And we intend to avoid that.

Question: But in Britain isn't the time for discussion over - shouldn't a radical government be firmly in delivery mode after six years?

Peter Mandelson: When you are six years into a government the need to renew your thinking is all the more important.

Question: Looking at the guest list this weekend, aren't the prime minister's closest allies on the international stage conservative traditionalists such as President Bush and prime ministers Howard and Aznar who would never be invited to a progressive governance summit?

Peter Mandelson: What this conference shows is that New Labour, far from being isolated or marginalised, is in the mainstream of centre left thinking. Those attending are a tribute to the way in which Tony Blair is seen in progressive politics around the world.

People are looking to Britain as a model of the centre left in government, which is why over 500 people will be participating in the conference at various points over the weekend.

Question: So you wouldn't agree that New Labour, as some commentators have put it, is far from being a model and is suffering from an intellectual drift or even a "malaise"?

Peter Mandelson: There is no evidence for that. In the first term of government we laid the foundations for economic stability and much needed change in our public services, in health and education, in our welfare system, in the way in which we govern ourselves in this country.

Now in our second term we are bringing about radical change in all of those areas, but in addition we need to fix our sights on a third term agenda so that we maintain momentum and remain a government of real transformation.

Question: Are you worried as one of the original architects of New Labour that time is inevitably limited and in outcome terms so much more needs to be done?

Peter Mandelson: What we have to achieve will by definition never end. There are always changes in society and in the world that we need to respond to, there are always more complex problems which require more sophisticated solutions that's why you never become complacent, you never stop thinking, because if you do you become less relevant. We are determined to avoid that.

Already we have achieved the biggest programme of investment in our public services, notably in health and education, of any government since the second world war.

We are implementing the most radical programme to combat poverty that this country has ever seen. As a result the quality of our healthcare is up, waiting lists are down.

Education standards and achievements are up and we're lifting more people out of poverty than ever before. Crime, particularly violent crime, is down.

Now these are real achievements that make a difference to peoples' everyday lives. But you have to continue working hard if you want to maintain the pace of change and achievement.

Question: Has the government become too bogged down in target setting and chasing to stop and think about what direction it is going in?

Peter Mandelson: No, I don't think so. I think you have to measure your achievement otherwise you don't know how much you've achieved.

Targets enable you to measure your performance and how well you're doing. But targets are only that; a measure of what you are doing.

Most of your energy is devoted to bringing about the changes and making the achievements that are crucial to people's everyday lives.

Question: How worried should the government be that, as recent opinion polls suggest that and David Miliband has put it, New Labour is now seen as the incumbent in power and responsible for problems in public services?

Peter Mandelson: I think people see this government for being both responsible for the changes and improvements that have taken place, but also responsible for the further changes that have yet to be achieved.

There is certainly no evidence that people are looking to the Conservative Party as a better alternative to the government, unless you've seen opinion polls that I haven't seen.

Question: Is it possible to be seen as both incumbent and insurgent at the same time?

Peter Mandelson: I'd put it differently, you both have to deliver change and renew your ideas whilst you are bringing about day to day delivery.

And that is hard because the temptation is always to become absorbed in the day to day running and administration of the government rather than lifting your sights, seeing the bigger picture and constantly reappraising how you need to adjust and respond to new challenges which require more sophisticated responses.

But you do have to do both those things in order to maintain the momentum and the pace of change that you want to bring about.

Question: Is it true that, as some commentators have put it, that this is an "elitist" and "grand" summit that you are convening?

Peter Mandelson: All the progressive governance meetings to date have been summits for heads of government only. This conference which the prime minister has instigated and is hosting, is the first one its kind gathering in the masses as well as the big guns.

Question: But Labour Party members don't seem to have much enthusiasm for the Third Way as an ideology and have seen it as an electoral strategy...

Peter Mandelson: What's the evidence for that?

Question: Might not the falling membership of the Labour Party suggest that?

Peter Mandelson: I don't think there is any evidence for that. I think most people in the party view New Labour as driven by values, responsive to change and internationalist in outlook. Those are the hallmarks of progressive politics which enjoy overwhelming support in the party.

Question: Should a progressive government in the era of globalisation be seeking to join a single currency as a matter of absolute urgency?

Peter Mandelson: It depends what you mean by "absolute urgency".

Question: Before the next general election?

Peter Mandelson: It's not driven by timetables, it's driven by economics. But it is certainly in Britain's national interest to go in as soon as practical.

Question: When New Labour has tried to introduce radical, third way thinking such as top-up fees and foundation hospitals they seem to come up against opposition from the party's own members and MPs...

Peter Mandelson: Well people fear change. Some people think it's better to keep to the model of monolithic, one-size-fits-all public services. But I think the majority in the party are persuaded that you need both choice and equity in the provision of public services and is certainly what other European countries, notably in Scandinavia and the Netherlands are doing.

Question: How can the government persuade its own supporters to have the stomach for these ideas?

Peter Mandelson: By generating debate and discussion in the party, by showing a vision of the high standards of quality of public services which are designed for individual needs and for those who are the least well off in society.

At the moment public services designed as they are provide a platform for the millions of our fellow citizens to stand on. They are the means for people to realise their potential and to create life chances that would otherwise be unavailable to them.

But public services are not perfect and where they let people down those tend to be the people less well off in society. That is not something we can tolerate.

Question: Is another problem here that the Treasury seems to stand in the way of radical thinking, as on the euro, top-up fees and foundation hospitals?

Peter Mandelson: I don't think there is any evidence for that. Obviously the Treasury is concerned about maintaining prudence and discipline in relation to public finances. That's the Treasury's job. That doesn't mean to say that they stand in the way of reform and change.

Question: Should the Treasury have such a cross-cutting influence in policy formulation or should it simply set the Budget, collect the tax and distribute the takings?

Peter Mandelson: Not under this government.

Question: But would it be in other models of government?

Peter Mandelson: No, we have a Treasury in this country led by ministers who are committed to reform and change. Without that we wouldn't be able to make the progress we are achieving.

Question: The prime minister this week warned his party that disunity could lose it the next election. You've already talked of a third term, is that a real risk or is it a scare tactic?

Peter Mandelson: It's always a risk for any government that as it gets older it becomes more divided. That's certainly been the story of Labour governments in the past. On August 2 this year this government will have served longer in office than any government in the party's history.

That's a great achievement but it's also a comment on how short-lived previous Labour governments have been. So we must now be doing something better but we have to keep to the united path if we're going to sustain ourselves in office. And that's what the prime minister was urging in his remarks yesterday.

Question: Finally, Roy Hattersley recently mourned your loss from the Cabinet as it showed up the lack of intellectuals in government. Do you agree?

Peter Mandelson: It is kind of Roy Hattersley to make the observation. But you don't have to be in government to make an intellectual contribution. As chair of Policy Network I'm able to do that and I'll have another opportunity to do so at this weekend's conference.

Question: But you don't think there is a lack of intellectuals in government?

Peter Mandelson: No I don't think there is a lack of intellectual thought in government.