A five-figure sum paid to Lord Peter Mandelson after his dismissal as UK ambassador to the US is now under official review. This development follows significant public and political pressure, including demands from government ministers for Mandelson to either return the payment or donate it to charity. The situation has intensified due to newly surfaced documents suggesting potential misconduct during his previous government service.
Background of the Payment and Dismissal
Lord Mandelson was removed from his position as UK ambassador to the United States in September 2025. The dismissal followed public scrutiny of his relationship with Jeffrey Epstein, a financier convicted of sex offenses. Mandelson had held the ambassadorship for seven months prior to his removal.
Following his dismissal, a financial settlement, described as a "five-figure payoff," was reached between Mandelson and the Foreign Office. Details regarding the exact sum remain undisclosed, but reports suggest it is equivalent to three months' salary.
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Intensifying Scrutiny and Demands for Return
In recent days, political figures have publicly stated their views on the payoff. Pat McFadden, Secretary of State for Work and Pensions, expressed a sentiment of being "angry and betrayed" regarding Mandelson's actions. He explicitly stated that Mandelson should hand back the payoff or give it to charity. Similar calls have been made by allies of Prime Minister Sir Keir Starmer, who suggested Mandelson should return the taxpayer-funded sum or donate it to a charity supporting victims.
This pressure is compounded by revelations from recently released documents. These documents reportedly indicate that Mandelson may have leaked information to a friend while serving as a government minister. These allegations have prompted further investigation, with police having searched two of Mandelson's properties.
Official Review and Potential Implications
In response to the growing controversy, the Foreign Office has launched a review into the exit payment made to Lord Mandelson. The purpose of this review is to examine the circumstances surrounding the payment.
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The situation raises questions about the vetting process for diplomatic appointments and the handling of public funds. The allegations of leaking information are also being examined, with potential implications for market abuse laws, including insider trading, which are overseen by the Financial Conduct Authority (FCA).
Mandelson's Position and Responses
Lord Mandelson has accepted the Prime Minister's decision regarding his dismissal, stating he had "no alternative" but to do so. He also expressed that he was leaving the UK-US relationship "in a really good condition" and highlighted the U.S.-U.K. Technology Partnership as a source of pride. Representatives for Lord Mandelson have been contacted for comment regarding the current payoff review and the recent demands.
Evidence and Key Information
Dismissal Date: September 2025
Reason for Dismissal: Relationship with Jeffrey Epstein
Payoff: Described as "five-figure," potentially equivalent to three months' salary.
Current Action: Foreign Office review of the payoff.
Political Pressure: Calls from ministers and Starmer allies for repayment or donation.
Additional Allegations: Leaking information while a government minister.
Investigations: Police searches of Mandelson's properties; FCA may be involved in market abuse allegations.
Sources:
The Guardian: https://www.theguardian.com/politics/live/2026/feb/08/peter-mandelson-payoff-keir-starmer-jeffrey-epstein-ambassadoruk-politics-live-news-updates
Context: Published 9 hours ago, this article details current political reactions and statements from ministers regarding the Mandelson payoff.
Sky News: https://news.sky.com/story/review-launched-into-peter-mandelsons-us-ambassador-payoff-13504465
Context: Published 1 day ago, this article reports on the Foreign Office review and provides background on Mandelson's dismissal and associated anger in Westminster.
Context: Published 3 days ago (but referring to recent events), this article confirms the Foreign Office review and highlights No 10's calls for Mandelson to return the money.
iNews: https://inews.co.uk/news/foreign-office-to-review-mandelsons-five-figure-us-ambassador-payoff-4222178
Context: Published 1 day ago, this article details the review and links the pressure to allegations of sharing market-sensitive information, mentioning the FCA.
AOL News: https://www.aol.co.uk/articles/mandelson-faces-demands-hand-back-222624486.html
Context: Published 1 day ago, this article summarizes the demands for Mandelson to return the payoff and links the intensified anger to the document revelations about leaking information.
TIME: https://www.time.com/7316349/peter-mandelson-fired-uk-ambassador-united-states-epstein-controversy/
Context: Published September 11, 2025, this article reports on Mandelson's initial dismissal and his statement accepting the decision.
US News: https://www.usnews.com/news/world/articles/2025-09-11/uk-withdraws-peter-mandelson-as-us-ambassador
Context: Published September 11, 2025, this article covers the initial withdrawal of Mandelson as US Ambassador due to Epstein links and mentions scrutiny over judgment.
GB News: https://www.gbnews.com/politics/peter-mandelson-foreign-office-launches-review-five-figure-ambassador-payoff
Context: Published 9 hours ago, this article also reports on the Foreign Office launching a review into the payoff.
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