(LONDON) - Former EU trade chief Peter Mandelson was elevated to the House of Lords Monday to allow him to re-join the British government -- and immediately faced new criticism over money.

Just days after being appointed by Prime Minister Gordon Brown as Business Secretary to help tackle the economic crisis, Mandelson is facing questions over a payoff and pension from the European Commission.

Mandelson, who twice resigned from Tony Blair's cabinet under a cloud, was European Union (EU) trade commissioner from 2004 before returning to London this month and is in line for a perks package from Brussels criticised by the main opposition Conservatives.

"Peter Mandelson has only been in the job a week and he's already sorted himself a nice little earner," said the Conservatives' Europe spokesman Mark Francois.

"Not only did Gordon Brown recall Peter Mandelson to shore up his own position, but it adds insult to injury to know taxpayers will have to pay extra for the privilege."

Media reports said the package could be worth up to a million pounds (1.3 million euros, 1.7 million dollars).

But a spokeswoman for the Department for Business told AFP he would receive up to the difference between his current salary and his European salary for the next three years -- a total of 230,000 pounds.

Mandelson, 54, will also get an EU pension of 36,000 euros annually from age 65 onwards, she said, adding it was not clear whether he would take the payments.

Meanwhile, Mandelson also denied a conflict of interest after The Times newspaper reported that he met Russian oligarch Oleg Deripaska on his yacht in Corfu earlier this year.

Deripaska made his fortune in aluminium, which came under Mandelson's remit as EU trade commissioner.

Mandelson told The Times: "I'm satisfied I've never been presented with any conflicts of interest among those I have met."

Mandelson is not a lawmaker and so must be appointed to the House of Lords before he can formally take up his new role in Brown's government. He will take the title Baron Mandelson of Foy and Hartlepool.

Foy is a village in central England where he holidayed and Hartlepool is the industrial north-east English town which he represented as a lawmaker from 1992 to 2004.

Mandelson was dubbed the "Prince of Darkness" while he was the Labour Party's communications chief during the 1980s, when he played a key part in helping the party move to the centre ground after years out of office.

After Labour under Blair took power in 1997, he became a minister and later Trade Secretary but quit in 1998 after revelations he accepted a large loan from a ministerial colleague to buy an upmarket house in London.

He came back into the cabinet in 1999 as Northern Ireland Secretary but resigned again two years later in a row about British passports provided for the ultra-rich Indian businessmen the Hinduja brothers.

A subsequent inquiry cleared Mandelson of any blame.

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