Banker Nathaniel Rothschild lost his libel action today over being portrayed as a "puppet-master" who brought together Lord Mandelson and Russian oligarch Oleg Deripaska.
The 40-year-old Swiss-based financier had asked for very substantial damages from Associated Newspapers over what he called "sustained and unjustified" attacks in a May 2010 story in the Daily Mail.
The newspaper denied libel and pleaded justification.
After the decision was given by Justice Tugendhat, who heard the case at London's High Court without a jury, Rothschild, who was not present, said in a statement that he intended to appeal.
"I am disappointed with today's ruling, although I do not regret bringing the action."
Rothschild's counsel, Hugh Tomlinson QC, said during last month's trial that the newspaper's case was that the banker took Lord Mandelson, then European Commissioner for Trade, on a January 2005 trip to Siberia in order to impress Mr Deripaska when he knew, or ought to have known, that if anyone found out about it, Lord Mandelson would have been compromised.
He added that it was also said there were grounds for believing that Lord Mandelson discussed aluminium tariffs with Deripaska and Rothschild encouraged the inappropriate relationship.
Lord Mandelson and Deripaska were not parties to the action and did not take any part in the trial.
Tomlinson emphasised that the case was not about them and the newspaper made no allegations they had done anything wrong.
Giving evidence, Rothschild said he was "incredibly upset and distressed and amazed" when he saw the story, which he dismissed as "fiction".
In his statement today, he said: "I brought this action seeking an apology for the Daily Mail's utterly false claim that I had arranged for Lord Mandelson to attend a dinner in Moscow to close a deal between Alcoa and Rusal and that this had caused the loss of 300 British jobs.
"The truth is, as the Daily Mail has now accepted, that I had nothing whatsoever to do with this deal and that it had in any event been completed before Lord Mandelson and I even arrived in Moscow.
"Lord Mandelson's trip to Russia was entirely recreational - as the court has accepted - and Lord Mandelson had obtained clearance for the trip from his office before undertaking it."
Rothschild said in evidence that the overnight trip to Abakan taken by himself, Lord Mandelson, another friend, Sebastian Taylor, Peter Munk, chairman of Barrick Gold, and Mr Deripaska, who had a chalet nearby - was "purely social".
It included a visit to a smelter facility and its museum, a banya - a Russian-style sauna - skiing, five-a-side football, ice-hockey, Russian billiards and entertainment by a Cossack band.
He added: "No EU tariffs or other matters of that nature were discussed. The only business was to take place in Central Asia, after Lord Mandelson had returned to Brussels."
But, Andrew Caldecott QC, for Associated Newspapers, said that the defence should succeed as it was "clear beyond doubt" that the article meant there was a "wider malaise", and that aspects of the trip made good the "central sting".
Rothschild fostered a relationship between Lord Mandelson and Deripaska which endangered the dignity and reputation of Lord Mandelson's office by bringing him inappropriately close to Deripaska, he added.
Caldecott said that the hospitality provided by Deripaska included a private jet flight from Moscow to Siberia, transport, wining and dining.
The extreme brevity of the trip, the four-hour flight, the temperature of -25 degrees, all invited the outsider to think there was a "keenness" to meet Deripaska.
"All these were the results of Rothschild's invitation to Lord Mandelson and the effect is cumulative as well as individual," he said.
Caldecott added: "It is way beyond the norm for a Russian oligarch to be flying the trade commissioner, who he does not know well at the time, to fly him in his private jet to his private chalet to be wined and dined by him.
"It creates the perception that Lord Mandelson may be beholden to his host and also gives Mr Deripaska cachet."
He said there was no dispute that Mr Deripaska was a man "who has been and is interested in political influence".
The heart of the purpose of the trip was plainly to allow Mr Deripaska to get to know Lord Mandelson better, and the newspaper said that was inappropriate.
It was accepted that there were recreational moments to the trip, but counsel said the court should be wary of the photos it had seen, which Mr Rothschild said showed a "light-hearted and enjoyable visit" by friends.
"Businessmen discuss business on ski lifts - and when they are having banyas. You may have a recreational background to a business discussion," he said.
In his judgment, Mr Justice Tugendhat said:
"In my judgment there is at the very least reasonable grounds to believe that Mr Deripaska's interest in providing to Lord Mandelson such luxurious and generous hospitality was as Mr Caldecott suggested.
"And I cannot accept that Mr Rothschild was unable to foresee this at the time he invited Lord Mandelson on the trip. In my judgment Mr Rothschild did appreciate this at the time.
"A holder of public office such as a Commissioner is required to make a clear distinction between his public life and his private life."
He went on: "The giving and receiving of gifts and hospitality are always a reflection of a relationship which already exists, or it is intended to develop, between the donor and the receiver.
"The receipt of hospitality from someone who is not already a friend always gives rise, or ought to give rise, to some sense on the part of the receiver that he is in some way under an obligation to the donor."