Sir Keir had robustly defended the peer earlier this week, but a government minister said new emails showing Lord Mandelson offering support to Epstein as he faced jail for sex offences meant the “depth and extent” of the two men’s relationship was “materially different from that known at the time of his appointment”.
It follows the release by a US congressional committee of the so-called “birthday book”, compiled for Epstein’s 50th in 2003, which included multiple notes from the Labour peer hailing the disgraced financier as his “best pal” and “an intelligent, sharp-witted man”.
He also wrote that he would spend “many hours just waiting for him to turn up”.
Further leaked emails published by the Sun and Bloomberg showed Lord Mandelson offering Epstein support in 2008, as he faced prison for sex offences.
“I think the world of you and I feel hopeless and furious about what has happened,” he wrote, adding that Epstein should “fight for early release”.
Tony Blair and Peter Mandelson (Image: Owen Humphrys/PA wire) At Prime Minister’s Questions this week, Sir Keir insisted he still had confidence in Lord Mandelson and that “due process was followed” in his appointment.
However, speaking in response to an urgent question in the House of Commons on Thursday, Foreign Minister Stephen Doughty said: “In light of the additional information in the emails written by Peter Mandelson, the Prime Minister has asked the Foreign Secretary to withdraw him as ambassador to the United States.
“The emails show that the depth and extent of Lord Mandelson’s relationship with Jeffrey Epstein is materially different from that known at the time of his appointment.”
The SNP’s Stephen Flynn said Sir Keir had left his ministers to “shred” their reputations by forcing them to defend Lord Mandelson.
In the Commons he questioned the appointment, and backed Tory calls for all relevant materials to be released.
“I do not know what it is about the decades of scandals and being best friends with the notorious child trafficker and paedophile which should have got some alarm bells ringing in No 10 before this decision was taken,” he said.
He also asked if Labour had removed the whip from the peer.
Mr Doughty dodged the question.
Former Tory minister Sir David Davis said Lord Mandelson’s appointment shows the “sheer size of the failure of the vetting process”.
“In the public domain, Lord Mandelson had to resign for not telling the truth about an interest free loan. He had to resign, on the second occasion, because he had helped out a business friend to get a passport.
“Beyond that, there are still unresolved doubts about his behaviour as the European trade commissioner when he gave concessions to the Russians.”
He added: “When he came to be a minister again, in 2010, the code section 71 says ministers must ensure that no conflict arises, or could reasonably be perceived to arise, between their public duties and their private interests, financial or otherwise.
“Secretaries of State don’t have private diaries he spent time with or in Mr Epstein’s flat, it seems, quietly meeting other members of the people involved in the Sempra deal, which cannot be cannot be seen to following his proper duty as a Secretary of State. Was this investigated?”
Mr Doughty replied: “All candidates for ambassador positions are subject to routine, extensive vetting and background checks.”
Lib Dem leader Sir Ed Davey said the Prime Minister should come before Parliament to explain why Lord Mandelson was appointed US ambassador in the first place.
Sir Ed said in a statement: “The Prime Minister now needs to appoint an ambassador who will stand up to Trump, not cosy up to him and his cronies.
“He also needs to come before Parliament and explain why Lord Mandelson was appointed in the first place, given everything the Government knew then.
“This Government seems to be lurching from one crisis to another. It desperately needs to get a grip on fixing the economy and public services so badly damaged by the Conservatives.”Peter Mandelson and John Swinney leaving the White House (Image: Molly Riley) According to reports the decision to sack him was taken on Thursday morning by Sir Keir and Foreign Secretary Yvette Cooper.
Lord Mandelson has reportedly wanted to fight on.
In recent days, there had been growing disquiet from Labour MPs too over the Prime Minister’s decision to stand by Lord Mandelson.
On Wednesday night, Andy McDonald, Labour MP for Middlesbrough and Thornaby East, said: “I fail to see how our ambassador to the US can possibly continue in post.
“That he continued to engage with the paedophile Epstein after he was indicted is simply staggering.
“If it is right that in addition he was directly involved in business activity to the advantage of Epstein while he was business secretary, then that raises huge issues. If true it is not only unacceptable, it raises questions about whether he complied with the ministerial code.”
Sir Keir’s decision to appoint Lord Mandelson means the Prime Minister now faces questions about his judgment.
In 1998, Lord Mandelson was forced to resign from his role as trade secretary after it emerged he had received a secret £373,000 loan from a fellow minister, Geoffrey Robinson, to buy a home.
He returned to cabinet just a year later, but was then, once again, forced to quit a year later, over the so-called Hinduja passport affair — allegations that he had helped a billionaire donor secure British citizenship in return for support for the Millennium Dome project.
An inquiry ultimately cleared him of wrongdoing.
He bounced back as a European commissioner, and then entered the Lords in 2008 when Gordon Brown ennobled him and made him business secretary.
Lord Mandelson had accompanied John Swinney to his Oval Office meeting with Donald Trump on Tuesday.
Speaking to press yesterday, the First Minister declined to say if he had confidence in the peer.
“The choice of ambassadors is for the Prime Minister to take and to defend, and it is up to the Prime Minister to address these issues,” he said.