Sir Keir Starmer received a brief two-page assessment from Cabinet Office ethics officials near the end of 2024 outlining potential complications surrounding Lord Mandelson's appointment as Washington ambassador.
The document covered largely public information about conflicts of interest linked to Global Counsel, the lobbying firm Mandelson co-founded with clients in Russia and China, alongside details of his two previous government resignations and associated controversies.
The file's most critical section addressed Jeffrey Epstein, the paedophile financier, explicitly stating that Mandelson maintained his friendship with Epstein following the 2008 conviction for soliciting child prostitution.
Officials are believed to have included a 2023 Financial Times article exposing the relationship's depth through a 2019 JPMorgan internal report finding that: "Jeffrey Epstein appears to maintain a particularly close relationship with Prince Andrew the Duke of York and Lord Peter Mandelson, a senior member of the British government."
The report indicated Mandelson stayed at Epstein's Manhattan townhouse in June 2009 during the financier's imprisonment, with the document containing links to photographs showing the pair together.
A source familiar with the Cabinet Office assessment described it as a "two-page word doc that has been cut and pasted from Google" and questioned why this constituted the sole vetting conducted before Starmer announced the appointment, calling the situation "insane."
The report's contents were not entirely new to Starmer, who faced questions at a January 2024 press conference about whether Mandelson should answer for stays at a convicted sex offender's residence.
He said: "I don't know any more than you and there's not really that much I can add to what is already out there I'm afraid."
The Cabinet Office document now sits at the heart of questions about Starmer's judgment and political future.
The Prime Minister conceded at the dispatch box on Wednesday for the first time that he knew about Mandelson's "ongoing" Epstein friendship when appointing him US ambassador.
The admission has left Labour MPs baffled and angry, with many who harboured long-standing Mandelson concerns now demanding answers to one overwhelming question: Why?
Backbench mood has turned increasingly toxic as Starmer attempted an explanation at Prime Minister's Questions, acknowledging awareness of the friendship while claiming ignorance about its depth or extent and stating Mandelson "lied repeatedly to my team" when questioned about the Epstein relationship.
Starmer had intended to present hard evidence supporting his claims, having asked Mandelson three questions through Morgan McSweeney, his chief of staff, before the appointment: Why continue the Epstein friendship after conviction? Why stay at his New York home during the financier's incarceration? Was he the "founding citizen" of an Epstein-backed conservation charity?
Mandelson reportedly told Number 10 he did not stay at Epstein's Manhattan apartment in 2009, previously stating publicly he had no recollection of such a visit.
Epstein correspondence reveals a different story, with Mandelson messaging on June 16, 2009: "stay at yours Friday-Sunday this weekend?"
Epstein, then imprisoned, responded by offering a central Manhattan apartment alternative, adding: "Press issues?" and "Your call I'm thrilled to host and sad I'm not there."
Mandelson confirmed his New York visit was private and "sd be ok," stating: "Better facilities at yours."
Two factors prevented Starmer from publishing evidence supporting his lying claims, reports The Times.
Scotland Yard contacted Number 10 on Wednesday morning warning against releasing material potentially prejudicial to the criminal investigation into Mandelson, while Starmer simultaneously lost his own MPs' trust as backbenchers signalled support for a Conservative humble address - an archaic mechanism Starmer himself repeatedly deployed to obtain documents.
The Conservatives requested everything from the Cabinet Office report to all McSweeney-Mandelson correspondence plus information provided to security services during vetting, with the Government tabling an amendment allowing exemptions for national security and international relations that again drew Labour MP opposition.
Former deputy prime minister Angela Rayner argued the Intelligence and Security Committee should determine national security exemptions, implicitly suggesting the Government could not be trusted.
Ministers capitulated after hasty discussions behind the Speaker's chair between Jonathan Reynolds, the chief whip, his Conservative counterpart and Intelligence and Security Committee members, producing an on-the-fly "manuscript amendment" granting ISC oversight.
The developments left Starmer in limbo, with attention previously concentrated on McSweeney as the appointment's driving force - someone Starmer vigorously defended in the Commons as an "essential" team member.
One backbencher assessed the situation bluntly: "This could be the end for Keir. The lack of any grip from No 10 today, the public backing of Morgan at PMQs, it makes him look like a puppet."
Starmer's decision appears more puzzling given the two men are not close and did not particularly know or like one another, yet McSweeney championed Mandelson throughout the lengthy selection process.
Officials were informed before the 2024 election that Labour would make a political appointment to the British embassy in Washington, with Mandelson's name mentioned in civil service access talks alongside Jonathan Powell, Tony Blair's former chief of staff who ultimately became Starmer's national security adviser.
Even late shortlisting of George Osborne, the former chancellor and friend of Vice President JD Vance, could not derail Mandelson's selection.
The pair first collaborated during the 2001 election campaign when McSweeney held a relatively junior position, forging their relationship under Jeremy Corbyn's leadership while working together to wrest party control from the organised left.
Their connection deepened to the point where one memo submitted to Starmer about plans to confront Corbynites was actually written by Mandelson, while the peer served as guest of honour at a fundraiser for McSweeney's wife Imogen Walker's parliamentary campaign as Scottish Labour MP.
Reports suggest Mandelson directly assisted McSweeney in selecting candidates for the 2024 election.
Many Labour MPs are targeting McSweeney, with one revealing he confronted the Prime Minister directly over Mandelson last year and demanded his chief of staff's dismissal - a request Starmer refused.
Starmer's best-case scenario now rests on claiming Mandelson misled him about the Epstein relationship's extent, yet what remains beyond dispute is that the Prime Minister knowingly appointed someone who maintained friendship with a paedophile after conviction to oversee the special relationship.
The gamble that Mandelson's political acumen made him suitable for the role has backfired spectacularly.
