PETER Mandelson, the European Union commissioner and former cabinet minister, is to be recommended by Tony Blair for a peerage.
The former prime minister is expected to put forward Mandelson's name to the Lords appointments commission shortly.
Although the appointment is likely to be controversial and has already irked some Labour colleagues, it is usual practice for Britain's EU commissioners to be sent to the House of Lords.
Mandelson will not be able to take his seat in the upper house as there are still 16 months left of his term as trade commissioner in Brussels, where his duty is to represent all 27 EU member states.
He has confirmed he will step down from the role in 2009. A friend of Mandelson said: "It will be like an honorary title and he won't get involved in the day-to-day workings of the House of Lords. He wouldn't want to anyway. But I'd expect him to make an appearance when things get spicy. I don't doubt it will be controversial."
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It is not expected that Blair will publish a resignation honours list - or "lavender list" - as previous prime ministers have done. Instead he will put forward names to the appointments commission "in the normal way".
The move ends the tradition where departing prime ministers nominate whoever they like for a peerage without checks on the candidates' suitability. Blair may have been influenced by concerns that such a list would heighten accusations of crony-ism at a time when the Crown Prosecution Service may be close to recommending charges in the cash for honours affair.
MPs are likely to consider it ironic that Mandelson is to be elevated to the Lords during the premiership of Gordon Brown, a bitter rival of the EU commissioner.
One senior Labour MP said: "Mandelson's got no chance of getting anything out of Gordon, so Tony's rewarding him while he can. This is right up Mandelson's boulevard - he's been lording it up for years."
It is not clear what title he will take but possibilities are Lord Mandelson of Hartlepool, his former Commons constituency, or Lord Mandelson of Hampstead, the area of north London where he grew up.
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Mandelson has long been a controversial figure. He was sacked twice from the cabinet. The first occasion was for not declaring a loan from a fellow MP to buy a home and the second was over a scandal involving allegations that he fast-tracked passport applications for friends.
He will join other EU commissioners who have accepted peerages. Mandelson's predecessors in the EU, Neil Kinnock and Chris Patten, were made life peers in 2005 after working in Brussels. Only one former EU commissioner has refused the offer of a seat. Bruce Millan turned down the honour because, according to one colleague, he "didn't believe in the House of Lords".