Sacked US ambassador Mandelson’s pay-off ‘to be reviewed by government’
Lord Peter Mandelson, whose US ambassador was sacked while he was being investigated by the Foreign Office, reportedly received a five-figure payout as part of his exit package.
The peer was sacked over his relationship with pedophile financier Jeffrey Epstein, but anger in Westminster intensified after the publication of recent documents showing he leaked information to his friend while he was a government minister.
His disgraced colleague, who was forced out of his position in September last year, received a payment equivalent to three months’ salary, according to the report. Times.
Lord Mandelson’s salary has not been made public, but the newspaper’s calculations suggest his former role would have earned him a salary of between £155,000 and £220,000 a year, at the top band of the diplomatic service. This shows Lord Mandelson received an exit payment of between £38,750 and £55,000 before tax and other deductions.
Prime Minister Sir Keir Starmer’s allies say his peer should return taxpayer-funded aid or donate it to a victims’ charity.
A Foreign Office spokesperson said: “Peter Mandelson’s civil service employment was terminated in September 2025 in accordance with legal advice and the terms and conditions of employment.
“As we have repeatedly told Parliament, normal civil service HR processes were followed.
“Further information will be provided to Parliament as part of the Government’s response to the motion passed last week and coordinated by the Cabinet Office.
“An investigation has now been launched in light of further information emerging and the ongoing police investigation.”
The revelations follow recent emails from the US Department of Justice showing Lord Mandelson leaked sensitive government information to Epstein.
Lord Mandelson was sacked in September last year after a different set of emails emerged which revealed his peer had continued a relationship with Epstein after he was found guilty of soliciting a minor for prostitution.
However, new findings suggest that there is a much deeper relationship between the two than previously suggested. Police were seen searching two homes linked to Lord Mandelson on Friday, and it was confirmed that an investigation into misconduct in public office had been launched.
Sir Keir faces a fight to keep his job as figures from across the political spectrum call on him to resign over his decision to appoint Lord Mandelson. Both David Lammy and Angela Rayner reportedly warned him against giving Lord Mandelson the role of ambassador due to concerns about his colleague’s known relationship with Epstein.
Speaking at Prime Minister’s Questions on Wednesday, Sir Keir said Lord Mandelson had “lied repeatedly” about his closeness to the disgraced financier and accused him of “betraying” the country.
The Prime Minister is also facing calls from Labor ranks for a “complete overhaul of staff” at Downing Street and for him to admit he made a “catastrophic error in political and moral judgement”; some are calling for the firing of chief of staff Morgan McSweeney.
Paula Barker, Labour’s deputy chair of both the standards committee and the privileges committee, criticized Sir Keir’s “questionable” judgment of the saga, adding: “When your chiefs of staff become the story, it’s often time for them to go.”
Labor MP Karl Turner added: “If McSweeney is still in 10 Downing Street, the Prime Minister is against it.”
Opposition parties called for the prime minister’s resignation following the outrage. On Saturday Conservative leader Kemi Badenoch said: Telegram Kemi Badenoch believes Sir Keir Starmer knew about Lord Mandelson’s links to Epstein but “chose not to care”.
The opposition leader said: “I was in government for five years. I know how the investigation works. I had to fight to get people to work.”
“If the Conservative Research Department had known that Mandelson was maintaining this friendship [with Epstein]everyone knew. But Starmer chose not to care. “He promised to be whiter than white, but still gave us self-righteousness and false piety.”
An FCDO spokesman said: “Peter Mandelson’s civil service employment was terminated in October 2025 in accordance with legal advice and the terms and conditions of his employment. “As we have repeatedly told Parliament, normal civil service HR processes were followed.
“Further information will be provided to parliament as part of the government’s response to the motion passed last week and coordinated by the Cabinet Office. A review has now been launched in light of further information emerging and the ongoing police investigation.”
Independent Contacted Lord Mandelson for comment.
