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The Foreign Office is reviewing payments of up to £40,000 to Lord Peter Mandelson after he was sacked as Britain’s ambassador to the US last year, as the scandal over the peer’s ties with Jeffrey Epstein deepens.
The review of the payments, confirmed by a Whitehall department, comes after Prime Minister Sir Keir Starmer apologized for giving Mandelson the top diplomatic role despite learning he had continued his friendship with Epstein after the financier was jailed for child sex crimes.
It comes as government ministers and advisers prepare to hand over to Parliament WhatsApp messages, text and email exchanges with Mandelson relating to his appointment as Britain’s envoy to the US.
Mandelson was dismissed as Britain’s ambassador to Washington in September last year after emails published by the US Justice Department revealed that the former cabinet minister had offered support to Epstein in 2008, shortly before he pleaded guilty to soliciting prostitution from minors.
According to separate emails released by the DOJ last weekend, Mandelson passed market-sensitive UK government information to Epstein while she was business secretary and de facto deputy prime minister under Gordon Brown in 2009 and 2010.
Mandelson’s two homes were raided by the Metropolitan Police on Friday as part of a criminal investigation into possible misconduct in public office.
Starmer, who is trying to appease angry Labor MPs, vowed to “engage constructively” with Parliament’s intelligence and security committee over the release of files related to the peer’s appointment.
In a letter to the committee on Friday, the Prime Minister said it was “vital that the documents are made available to Parliament as soon as possible”. Government officials estimate that 100,000 documents may have to be published.
Starmer believes some of the exchanges related to Mandelson’s investigation into the U.S. job will support his claim that the former ambassador “lied” about his relationship with Epstein, who died in a New York jail cell in 2019 while awaiting trial on sex trafficking charges.
But other messages sent between Mandelson and Starmer’s team may be more problematic. Morgan McSweeney, Starmer’s critical chief of staff, supported Mandelson for the job and was in close communication with him during his time in the US capital last year.
Some of Mandelson’s private exchanges could particularly strain Britain’s relations with Donald Trump if they paint the US president in a bad light.
Mandelson’s salary as Britain’s ambassador to the US has not yet been published, but the role would typically come with an annual salary of between £155,000 and £220,000.
Asked about the payment to Mandelson, which was first reported by the Sunday Times, Work and Pensions Secretary Pat McFadden said on Sunday that she should “probably… either give it back or give it to a charity, maybe around violence against women and girls”.
“Taking payment in these circumstances, I don’t think the public will think too much about it,” McFadden told Sky News.
Conservative shadow foreign secretary Dame Priti Patel said the taxpayer-funded payout to Mandelson was “a disgusting betrayal of Epstein’s victims”.
“Once again, this raises very serious questions about the Prime Minister’s judgment,” he said. “The Government must ensure that Mandelson’s golden farewell is fully recovered.”
Mandelson, who has left the House of Lords but retains his post, has not commented as police have said they are investigating him.
A spokesperson for Coworking did not immediately respond to a request for comment Sunday.
When he was dismissed as Britain’s ambassador to the US, Mandelson told embassy staff that he felt “very bad about my association with Epstein 20 years ago and the plight of his victims”.
The Foreign, Commonwealth and Development Office said: “Peter Mandelson’s civil service employment was terminated in September 2025 in accordance with legal advice and the terms and conditions of his employment. As we have consistently said to Parliament, normal civil service human resources procedures were followed.
“Additional information will be provided to Parliament as part of the Government’s response to the motion passed last week, which is being co-ordinated by the Cabinet Office. A review has been launched in the light of the additional information now revealed and the ongoing police investigation.”
