EU trade commissioner Peter Mandelson has confirmed he is to return to the British cabinet in a reshuffle.
The move has caused surprise at Westminster.
Mr Mandleson, who is a former Northern Secretary, has held two cabinet posts in the past and has twice resigned in controversial circumstances.
Prime Minister Gordon Brown's bringing back Mr Mandelson has been variously described at Westminster today as a stroke of genius and a sign of desperation.
Mr Mandleson and Mr Brown have been political rivals for years.
But his appointment to the cabinet as business secretary will strengthen Mr Brown's position with the Blairite wing of the party, many of whom would like to see him replaced as prime minister.
Others argue that, as a former trade commissioner, Mr Mandleson will bring global experience to the cabinet at a difficult time economically.
However, Mr Mandleson has served twice before, as Northern Secretary and as Trade Secretary, and has twice had to resign - once over a loan for his house and once over a passport application.
The Leader of the House of Lords, Baroness Ashton, will replace Mr Mandelson in Brussels.
Further moves expected
The expected reshuffle had been widely leaked, and in some detail.
Mr Mandelson takes over from John Hutton, who is heading for Defence where he will be replacing Des Browne who is leaving the Government.
In other moves, Chief Whip Geoff Hoon is going to Transport, taking over from Ruth Kelly who is standing down to spend more time with her young family.
He is to be replaced by Deputy Chief Whip Nick Brown, one of the Prime Minister's closest political allies.
Cabinet Office minister Ed Miliband, another key ally of Mr Brown, was heading a newly created department covering energy - currently part of the Business Department - and climate change, which is the responsibility of the Department of Environment.
There was also a return for Margaret Beckett as Housing Minister.
She was Trade and Industry Secretary in 1997, and later Leader of the Commons.
In 2001, she became Secretary of State for the new Department for Environment, Food and Rural Affairs before taking over at the Foreign Office in 2006 as Britain's first female Foreign Secretary.
