PM was warned of ‘reputational risk’ from Mandelson ties to Epstein, files show

Sir Keir Starmer was warned there was a “general reputational risk” over Lord Peter Mandelson’s relationship with paedophile financier Jeffrey Epstein before giving him the role of ambassador to the US.

A “due diligence” document drawn up by the Cabinet Office in December 2024 before Lord Mandelson’s appointment to the Washington role noted a series of reports detailing his links with Epstein.

Lord Mandelson was awarded a £75,000 taxpayer-funded payout when he was sacked nine months later, in September 2025, after further details of his relationship with Epstein emerged.

Details of Lord Mandelson’s appointment and subsequent removal from office were revealed in the first batch of documents relating to the peer released by the Government in response to a demand from MPs.

The files showed national security adviser (NSA) Jonathan Powell believed the process for giving Lord Mandelson the job was “weirdly rushed” and the Prime Minister was also warned by officials of the potential risk to him personally if the appointment backfired.

The due diligence document noted that after Epstein was first convicted of procuring an underage girl in 2008 “their relationship continued across 2009-2011, beginning when Lord Mandelson was business minister and continuing after the end of the Labour government”, noting that “Mandelson reportedly stayed in Epstein’s house while he was in jail in June 2009”.

It highlighted that in 2014 Mandelson agreed to be a “founding citizen” of an ocean conservation group founded by Ghislaine Maxwell, and funded by Epstein. Disgraced socialite Maxwell was a former girlfriend of Epstein and was jailed for 20 years in the US in 2022 for sex trafficking.

The section of the report concluded: “To note – general reputational risk.”

The 31 files released by the Government did not include correspondence between No 10 and Lord Mandelson, in which a number of follow-up questions were asked about his relationship with Epstein.

MPs were told those exchanges remained subject to the Metropolitan Police’s ongoing investigation into Lord Mandelson over allegations of misconduct in public office.

The Prime Minister has insisted Lord Mandelson “lied repeatedly” to No 10 about his relationship with Epstein, before and during his tenure as ambassador.

But the papers revealed senior officials had concerns over his appointment.

A record of a call between Mr Powell and Mike Ostheimer, the general counsel to the Prime Minister, said the NSA “raised concerns about the individual and reputation” to Sir Keir Starmer’s then-chief of staff Morgan McSweeney.

“MM responded that the issues had been addressed,” according to the note of the call, made in September 2025 as part of a fact-finding process surrounding Lord Mandelson’s sacking.

Sir Philip Barton, the then-Foreign Office permanent under-secretary, “also had reservations around the appointment”, the call record said.

The Prime Minister has been dogged by questions over his judgment in making a political appointment to place Lord Mandelson in Washington, rather than giving the prestigious role to a career diplomat.

The decision to appoint the former EU trade commissioner and UK business secretary was driven by the need to forge a close relationship with US President Donald Trump, who returned to the White House in January 2025.

But an official note to the Prime Minister warned of the risk in making a political appointment: “If anything goes wrong, you could be more exposed as the individual is more connected to you personally.”

Last month, MPs ordered the Government to release tens of thousands of documents relating to Lord Mandelson’s appointment following the US Department of Justice’s publication of the so-called Epstein Files.

Chief Secretary to the Prime Minister Darren Jones updated MPs on the release of the Mandelson papers in a statement on Wednesday afternoon.

He said the advice received by the Prime Minister ahead of Lord Mandelson’s appointment “did not expose the depth and extent” of his relationship with Epstein.

Mr Jones said: “After the Prime Minister reviewed the Cabinet Office due diligence, that noted public reporting on Peter Mandelson’s relationship with Jeffrey Epstein, questions were put to Peter Mandelson by advisers in No 10 …. and Peter Mandelson responded.

“These are matters that are currently the subject of an ongoing police investigation and we will publish this document when the investigation allows.

“When we do, the House will be able to see Peter Mandelson’s answers for themselves, which the Prime Minister regrets believing.”

After Lord Mandelson was sacked, the files show he first requested the remainder of his four-year contract was paid out in full, totalling more than £500,000.

Some files which touch on national security or foreign relations matters will be redacted but the final say on that rests with Parliament’s Intelligence and Security Committee.

Just one of the documents released on Wednesday was redacted in agreement with the committee.

The Government has also agreed a framework with the Metropolitan Police on which documents can be released without prejudicing the ongoing investigation into the former ambassador.

Lord Mandelson was arrested on February 23 on suspicion of misconduct in public office, having been accused of passing sensitive information on to Epstein during his time as business secretary in Gordon Brown’s government.

He was subsequently bailed, but later released from his bail conditions, although he remains under investigation.

The Tories called on the Government to demand Lord Mandelson return his severance payout to the public purse and to “release the files in full” following the publication of the first tranche.

Shadow chancellor of the Duchy of Lancaster Alex Burghart said: “The lapse in the Prime Minister’s judgment knows no bounds. Allowing a scandal-ridden former minister access to highly sensitive information before proper clearance is completely careless.

“Even more troubling is that this happened while the Government was aware of Mandelson’s long-standing, close connections to Epstein.

“Labour must come clean about what ministers knew, when they knew it, and why national security safeguards appear to have been treated so casually.