(BRUSSELS) - Britain on Friday nominated Baroness Catherine Ashton to replace Peter Mandelson as EU trade commissioner, the European Commission said, after Mandelson resigned to rejoin the British government.

Mandelson submitted his resignation to the EU's executive arm after being invited back into the British government ranks as embattled Prime Minister Gordon Brown announced a cabinet reshuffle.

Ashton, an economist by training, is currently Leader of the House of Lords and will become Britain's first woman EU commissioner.

EU commission leader Jose Manuel Barroso "has decided to attribute the trade portfolio to Baroness Ashton of Upholland," the commission announced in a statement.

"She has an excellent profile and President Barroso is delighted with her nomination," said his spokesman Johannes Laitenberger.

"She certainly has the background for the trade portfolio being an economist and she played an imminent role in the passage of the Lisbon Treaty" through the British parliament, he added.

Her nomination must be formally endorsed by Barroso and the member states.

Richard Corbett, deputy leader of the European Parliamentary Labour Party welcomed the news of Mandelson's return to domestic politics as "a good appointment," while admitting it was a surprise.

On Mandelson's appointment: "Yes I think it was a surprise and it shows that they (Brown and Mandelson) have buried the hatchet which was over played by the press," he said, describing Ashton's nomination as "an excellent choice".

Brown and Mandelson fell out in 1994 when the latter backed Tony Blair as Labour leader, creating divisions within the party that remain to this day.

In the commission, Mandelson has been a leading voice for free trade and has often clashed with fellow commissioners from less free-trade friendly countries such as France, Germany and Italy.

Apart from an early victory in his mandate negotiating textile quotas with China, Mandelson has struggled to make progress on other big files such as WTO trade liberalisation and revamping Europe's trade defence arsenal.

He was a frequent visitor to China where he sought to build up a close relationship with top officials amid frequent clashes between Brussels and Beijing over trade.

He came under fierce fire in July from French President Nicolas Sarkozy, who blamed Mandelson's handling of the failed world trade liberalisation talks for Irish voters' rejection of the EU's Lisbon reform treaty last month.

Under EU rules, Mandelson's resignation will be effective as soon as his successor is formally appointed.

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