Police have released Peter Mandelson from his bail conditions after deciding he was not a flight risk.

The Metropolitan Police is understood to have dropped the conditions they applied on the Labour peer after arresting him on suspicion of misconduct in public office last month.

He remains under investigation.

The disgraced former minister has been accused of passing sensitive information on to paedophile financier Jeffrey Epstein during his time as business secretary.

A Met spokesman said: “A 72-year-old man arrested on suspicion of misconduct in public office has been released under investigation. The investigation remains ongoing.”

The former cabinet minister said he was told by officers during his questioning that he had been arrested after a tip-off from the Commons speaker, Sir Lindsay Hoyle, that he was planning to flee to the British Virgin Islands.

The Met is understood to believe it made the right decision to arrest the peer but has apologised to Hoyle for revealing his name.

Sir Lindsay received an apology from the Met for “inadvertently revealing information during an investigation into allegations of misconduct in public office”.

The Speaker told the Commons that he had passed information along to the force about Lord Mandelson “in good faith” and said it was “regrettable this rapidly ended in the media”.

Sir Lindsay shared information with the Met that he learned while visiting the British Virgin Islands during Parliament’s recess, which led to Lord Mandelson’s arrest.

The Times reported the Met undertook the arrest for fear Lord Mandelson could be a flight risk, something his lawyers described as “baseless”.

It is understood that the first batch of the "Mandelson files" will be released next week.

The documents relate to Mandelson's appointment as the UK's ambassador to the US.