Prime Minister Keir Starmer is under growing pressure after newly unsealed U.S. Department of Justice files linked to Jeffrey Epstein reignited controversy surrounding Peter Mandelson, prompting Conservative demands for a full independent investigation into how Mandelson was appointed and later handled by the government. The disclosure has reopened questions about judgment, vetting failures and accountability at the heart of Downing Street.
The latest documents, part of the largest mandated release of Epstein-related materials, allege financial transactions totaling $75,000 between Epstein and accounts linked to Mandelson between 2003 and 2004. Mandelson has rejected the allegations as "false," but resigned his Labour Party membership, saying he wished to avoid "further embarrassment" to the government as scrutiny intensified.
The Conservative Party has seized on the disclosures to accuse Starmer of catastrophic misjudgment. A party spokesman described Mandelson as "completely disgraced," adding: "Yet Keir Starmer lacked the backbone to take action, allowing Mandelson to resign from the Labour Party instead of kicking him out." The spokesman continued: "Keir Starmer and his chief of staff appointed Mandelson ambassador despite his relationship with Epstein, and then refused to act even as the mountain of evidence against him grew."
The opposition is demanding transparency, arguing that the appointment of Mandelson as UK ambassador to Washington in late 2024 should never have proceeded. "Given the Prime Minister's appalling lack of judgement and the participation of his Downing Street operation, there must now be a full and thorough independent investigation," the spokesman said.
Mandelson was dismissed as ambassador in September 2025 after Bloomberg News reported on more than 100 emails documenting his continued contact with Epstein after the financier's 2008 conviction. Those messages included Mandelson referring to Epstein as "my best pal" and urging him to "fight for early release" ahead of sentencing, according to prior reporting.
The controversy has also focused attention on the vetting process. The Foreign Office later acknowledged that Mandelson was not subjected to full security vetting until after his appointment was announced, fueling claims from Conservative MPs that the process is "completely broken." Reports indicate security services had raised concerns before the appointment but were overruled.
In his resignation letter to Labour's general secretary, Mandelson wrote: "I have been further linked this weekend to the understandable furore surrounding Jeffrey Epstein, and I feel regretful and sorry about this." He added that he had "no record or recollection" of the alleged payments and questioned errors in the documents. "While doing this, I do not wish to cause further embarrassment to the Labour Party, and I am therefore stepping down from membership of the party," he wrote.
The fallout is landing amid broader strains for Starmer, who has already lost senior figures, including Deputy Prime Minister Angela Rayner and former chief of staff Sue Gray, over unrelated controversies. Attention has now turned to Starmer's chief of staff Morgan McSweeney, reported to have been a strong advocate for Mandelson's appointment.
Communities Secretary Steve Reed told Sky News: "I think it would be for Peter Mandelson to explain whether or not that money was properly declared, and if not, then he will need to account for that." Downing Street has asked Cabinet Secretary Chris Wormald to review Mandelson's contacts with Epstein, while Starmer has said "anybody with information" should be prepared to share it if asked.
Mandelson remains on leave from the House of Lords, where removing his peerage would require either legislation or a qualifying criminal sentence. The House Oversight Committee is also reported to be preparing to summon Mandelson to testify in Washington, adding an international dimension to a scandal now testing Starmer's authority barely a year into his premiership.
