Blair advised Mandelson on return
Peter Mandelson expects a close relationship with the prime minister
Peter Mandelson consulted Tony Blair before accepting a job in Gordon Brown's cabinet, he has revealed.
The new business secretary, whose return has caused controversy within Labour, said the former PM told him it was "a no-brainer" to take the job.
Mr Mandelson told Sky News he was "surprised" about the offer but thought it was the "right thing to do".
He sought to allay concerns from some within the party about the move, saying "we are all part of the same team now".
And he praised Gordon Brown, saying he had "changed", and had a "very steady hand on the tiller".
Speaking of his surprise appointment. Mr Mandelson said: "When times get tough, families pull together and that is what we are doing. It is all hands on deck."
Blair advised Mandelson return
He sought to play down reports that at least one cabinet minister, thought to be Schools Secretary Ed Balls, had tried to block his appointment. He said he had no problem at all with Mr Balls.
"We are all part of the same team now," he said. "It is what the party wants and what the country needs."
Asked about the mutterings about Gordon Brown's leadership in recent months, he said he did not believe there had been a "plot or conspiracy" against the prime minister.
However, he said people were "concerned" about the direction of the party and whether it had the capacity to renew itself.
Looking ahead, he said Labour had to show it had the strength to steer the country through the economic downturn and then come up with "new, imaginative ideas" to take the country forward.
"If I can play my part and make a contribution, that is what I want to do," he said.
Mr Mandelson has acknowledged that he and Mr Brown have had a difficult relationship in the past but he told the Observer that they had never completely neglected their friendship.
Conservative leader David Cameron told BBC One's The Politics Show that the appointment was a "pretty desperate move".
"We've got a government that is divided and dysfunctional, and I think this will make it more divided and more dysfunctional.
"For me, this is about trying to shore up the Labour Party; it's not trying to serve the country."
The Sunday Times reported that Mr Mandelson had recently "dripped pure poison" about the prime minister to a senior Tory.
Shadow chancellor George Osborne admitted twice dining with Mr Mandelson recently but refused to confirm whether he was the Conservative in question or what had been said.
"I don't think what he told me was any different from what he's been telling anyone who's been having dinner with him in recent months."
Mr Mandelson told Sky News he had met Mr Osborne "completely by chance" in a Greek restaurant but had not criticised the prime minister.
Chancellor Alistair Darling defended Mr Mandelson's appointment, saying it strengthened the government at a difficult time.
"People tend to get into a lather on this subject really quite unnecessarily," he told the BBC.
Mr Mandelson, an EU trade commissioner since 2004, said he was surprised but "proud" when his new role was announced on Friday.
His return has not been welcomed by some backbenchers on Labour's left, with one describing him as the most "divisive" figure in the party's recent history.
Mr Mandelson resigned from cabinet posts under Tony Blair's leadership - once over a loan from ministerial colleague Geoffrey Robinson and once over allegations of misconduct regarding a passport application for the Hinduja brothers.
He was later cleared of any wrongdoing.
Mr Brown is due to confirm further ministerial changes later, but Leader of the Commons Harriet Harman did reveal that Development Secretary Douglas Alexander would be election co-ordinator.
In the most recent changes announced, Shahid Malik was named a justice minister while Jon Trickett becomes Gordon Brown's parliamentary private secretary.
The BBC's political correspondent Jo Coburn said the latter move would "go some way to placating those on the left of the party".
The reshuffle could force Mr Cameron to follow suit, as he will need to appoint someone to shadow the new Department for Energy and Climate Change, led by Ed Miliband.
Meanwhile, a poll carried out in marginal constituencies before the reshuffle suggests the Tory leader is heading for victory.
The survey by ICM for the News of the World estimates Labour could lose 164 seats, giving the Tories a 78-seat majority.