Predictably, Mandelson has removed his gloves and launched a highly personal attack on the Tory leader:
Mr Cameron would rather be seen as complicit in Ashcroft's deception than take him on … [Ashcroft] has David Cameron by the balls. Stand up to him, and the Tories lose his money. Bow down in front of him, and Ashcroft continues to call the shots.
Mr Cameron has zig-zagged his way through his leadership of the Tory party. He speaks the rhetoric of change but on every hard issue - whether Ashcroft, Europe, grammar schools, dealing with the deficit - Cameron is too weak to pick a fight with his own party. That's why the Tories remain fundamentally unchanged.
As we discussed yesterday, Mandelson will push Ashcroft aside and use the saga to question Cameron’s judgement.
Cameron should start listening to Lord Tebbit, who says that Ashcroft should have admitted he was a non-dom years ago and has failed to ask himself the Daily Mail question:
Many, many years ago this was explained to me by Harry Legge-Bourke, then chairman of the 1922 committee, when he said of a certain course of action that was being discussed: 'If you would not be happy to read that in tomorrow's Daily Mail, then don't do it.' That Daily Mail test is the one that matters above all in politics.
Sound advice that means little if Cameron fails to act in a decisive manner over a saga that is refusing to go away.