Mandelson could be made to hand back 'five-figure' payoff after US ambassador sacking

A payment given to Lord Peter Mandelson when he was sacked as ambassador to the US is being reviewed after the latest revelations in the Epstein files.

The peer lost his role in September last year over his relationship with paedophile financier Jeffrey Epstein, just seven months into the job. However, anger in Westminster has grown after the last release of documents, which indicated he leaked information to his friend while he was a government minister.

Prime Minister Sir Keir Starmer's allies have said he should give the taxpayer-funded handout, which could run into the tens of thousands, back or donate it to a victims' charity. "Given what we know now, Mandelson should either pay the money back or give it to a charity to support victims," a Downing Street source said.

The Foreign Office said a review had been launched "in light of further information that has now been revealed". The payoff Lord Mandelson received could be as high as £55,000 before tax and deductions, the Sunday Times reported.

The Foreign Office previously said it had "reached a settlement in order to terminate Peter Mandelson's civil service employment with immediate effect, in accordance with legal advice and the terms and conditions of his employment". Full details of the payoff are set to be revealed in parliament after MPs backed a call for the papers relating to his time in government to be disclosed.

The Sunday Times suggests it could be between £38,750 and £55,000, which is based on a three-month payoff of the highest annual salary in the diplomatic service between £155,000 and £220,000. A Foreign Office spokesman 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.

"Normal civil service HR processes were followed. Further information will be provided to Parliament as part of the government response to the motion passed last week which is being coordinated by cabinet office.

"A review has been instigated in light of further information that has now been revealed and the ongoing police investigation." Lord Mandelson has been accused of sharing market-sensitive information with Epstein after the 2008 global financial crisis. Police investigating claims of misconduct in a public office by Lord Mandelson have concluded their searches of two of his properties - in Camden, north London, and in Wiltshire.

The Metropolitan Police said the criminal investigation is "complex" and will require a "significant amount of further evidence gathering and analysis". Read more:'Shocked, angry, betrayed': Former PM on MandelsonWhat do the Epstein files say about Lord Mandelson?Police search Peter Mandelson's properties ???? Listen to Sky News Daily on your podcast app ???? Lord Mandelson's representatives have been contacted for comment.

He has previously said: "I was wrong to believe Epstein following his conviction [in 2008 for procuring a child for prostitution and of soliciting a prostitute] and to continue my association with him afterwards. "I apologise unequivocally for doing so to the women and girls who suffered." On Saturday afternoon, a top corporate and financial crime lawyer visited Lord Mandelson's house near Regent's Park, London.

Adrian Darbishire KC arrived at the property shortly before midday, before leaving around 90 minutes later..