Peter Mandelson was offered a severance payment of £75,000 after initially asking the Foreign Office for more than £500,000 upon his sacking as US ambassador, newly released documents show. The ex-peer was forced to resign from the post last autumn because of newly disclosed details about his long friendship with child sex offender Jeffrey Epstein.
The documents, released by the Cabinet Office following a Conservative humble address motion, reveal that Mandelson consulted an employment KC who raised doubts about the “reasonableness of the PM’s decision” to sack him. Officials noted they did “well to get this settlement down this low with minimal fuss” after Mandelson opened negotiations asking for his full contract payout of over £500,000.
The chief secretary to the Treasury, James Murray, signed off on the £75,000 payment, which included a special severance deal of £34,670.50. Mandelson had emailed the Foreign Office’s HR boss, Mark Power, saying he expected his return to the UK to be treated with “maximum dignity and minimum media intrusion”.
The documents also show that Keir Starmer’s national security adviser, Jonathan Powell, raised concerns during the appointment process about Mandelson’s reputation directly with the prime minister’s then chief of staff, Morgan McSweeney, who said “the issues had been addressed”. Powell later described the appointment as “unusual” and “weirdly rushed”.
A police investigation into Mandelson has delayed the release of some documents, including the three questions Starmer put to Mandelson about his friendship with Epstein. The initial tranche includes a due diligence report noting that Mandelson stayed in Epstein’s house while the financier was in jail in 2009.
Conservative MPs are now demanding that Mandelson return the £75,000 payout, arguing it was inappropriate given his links to Epstein. The government has not commented on the demand.
