Keir Starmer finds himself under scrutiny once more, as questions arise regarding a controversial decision involving Peter Mandelson. On Wednesday night, it emerged that Mandelson received a severance package worth £75,000 from Downing Street, a sum notably double what was initially stipulated.

The payout followed Mandelson’s dismissal over his ties with the notorious financier Jeffrey Epstein, a relationship that cast a shadow over his career. Despite the agreed package, Mandelson had initially sought a much larger compensation of £547,000, arguing through his legal team that his job prospects had been severely affected.

Newly disclosed documents presented to Parliament indicated that Sir Keir Starmer had been alerted about Mandelson’s “particularly close” association with Epstein. It was cautioned that appointing Mandelson as the US ambassador posed a significant “reputational risk.”

The situation has prompted Tory leader Kemi Badenoch to call on Labour MPs to reconsider their support for the Prime Minister. Addressing Labour members, she urged them to evaluate whether Starmer is suitable for leading the nation, stating, “There are not enough Conservative MPs to remove the Prime Minister – he won a landslide. Labour MPs now need to consider their conscience and their position.”

In a conversation with Sky News, when questioned about whether Starmer should step down, Badenoch asserted, “We can’t make him resign. The only people who can fix this are Labour backbenchers.”

Asked if he should resign, she told Sky News: ‘We can’t make him resign. The only people who can fix this are Labour backbenchers.’

The documents also confirmed that Sir Keir was warned in advance that Mandelson had continued his friendship with Epstein following the financier’s conviction for child-sex offences.

The Cabinet Office told the PM in writing that appointing him as US ambassador would represent a ‘general reputational risk’ to the Government.

Keir Starmer, pictured on Wednesday, was facing fresh questions about his judgment after handing Peter Mandelson a pay-off worth double what he was entitled to 

Mandelson pictured with Jeffrey Epstein. Downing Street agreed a ‘special severance package’ worth £75,000 for the grandee after he was sacked over his friendship with Epstein

Despite this, Sir Keir went ahead and appointed a man who had twice been forced to resign from the Cabinet in disgrace. Incredibly, Mandelson was briefed on top-secret documents before his security vetting had been completed.

Whitehall sources said the letter signing off Mandelson’s pay-off was written by Foreign Office permanent secretary Sir Olly Robbins, who previously served as Theresa May’s Brexit negotiator.

One insider also blamed Sir Olly for the extraordinary decision to brief Mandelson on secret documents before he had been vetted. However, the documents show the pay-off was agreed with the Treasury and that both Foreign Secretary Yvette Cooper and No 10 were briefed on it before it was agreed. 

Officials claimed the £75,000 golden goodbye was ‘good value for money’ as it would result in Mandelson leaving quickly with ‘minimal fuss’. But MPs said he should have been booted out without a penny in compensation.

Mrs Badenoch said the revelations were ‘yet another indictment of Keir Starmer’s judgment’.

The Tory leader said: ‘The fact is we wouldn’t have been paying Peter Mandelson anything if Keir Starmer hadn’t appointed him in the first place.

‘The vetting we have now seen shows the Prime Minister should never have made this decision.

‘He has not been honest with the country and Parliament about what he knew.’

The revelations emerged in the first batch of files which the Government was ordered by MPs to release last month.

The files, covering Mandelson’s appointment and seven-month tenure in Washington, could eventually involve tens of thousands of documents.

The PM’s chief secretary Darren Jones said Sir Keir had ‘taken responsibility’ for Mandelson’s appointment, telling MPs: ‘He has acknowledged that it was a mistake and has apologised, not least for believing Peter Mandelson’s lies.’

Wednesday’s release of 147 pages of documents confirmed that Sir Keir was briefed on Mandelson’s long-term friendship with Epstein.

The paedophile was jailed in 2008 for soliciting a minor for prostitution. A ‘due diligence’ document compiled by the Cabinet Office stated that, despite this, Mandelson’s relationship with Epstein ‘continued across 2009-2011, beginning when (he) was business minister and continuing after the end of the Labour government’.

It noted newspaper reports that the Labour peer also stayed in Epstein’s New York mansion while he was in jail in 2009.

In a separate note to the PM, officials underlined the risk of appointing such a high-profile politician, saying: ‘If anything goes wrong, you could be more exposed as the individual is more connected to you personally.’

The documents suggest that the PM’s then chief of staff Morgan McSweeney, who pushed for the appointment of his mentor, drew up three follow-up questions for Mandelson on his relationship with Epstein.

Sir Keir has claimed Mandelson ‘lied’ in response. But the questions and his responses are thought to be among a handful of documents that were withheld at the request of the police who are investigating allegations against Mandelson of misconduct in public office.

One document states that the PM’s then communications director Matthew Doyle was ‘satisfied with his responses to questions about contact’ with Epstein.

Both Mr McSweeney and Lord Doyle were personal friends of Mandelson. Lord Doyle has since been suspended by Labour following separate revelations that he campaigned for a former Labour councillor after he had been charged with child sex offences.

Mr Jones told MPs it was now clear that the ‘due diligence process fell short of what is required’.

He said Mandelson had been sacked as soon as the depth of his relationship with Epstein was revealed by leaked emails held by the US Department of Justice.

Mr Jones urged Mandelson to give his pay-off to charity, saying the sum had been agreed ‘to avoid even higher further costs involving a drawn-out legal claim at (an) employment tribunal’.

Whitehall sources said the letter signing off Mandelson’s pay-off was written by Foreign Office permanent secretary Sir Olly Robbins, pictured

But MPs questioned why the payment had been made at all. 

Shadow Cabinet Office minister Alex Burghart, said the public would be ‘disgusted’.

He said the documents raised serious questions about the PM’s judgment. ‘The Prime Minister claims that he was lied to; he was not lied to by this due diligence document. It may be that Mandelson denied those claims, and if so, perhaps the Prime Minister was lied to, but by an inveterate liar who had been fired twice before.

‘We are supposed to believe that the Prime Minister, who was once the chief prosecutor in this country, could not see through this nonsense. It beggars belief.’ 

Tory MP Sir Julian Lewis questioned why the PM had pressed ahead with the appointment following the warnings about a man who had a reputation as ‘one of the most slippery and sleazy characters in modern British politics’.

Mandelson’s contract entitled him to three months’ notice worth £40,330. But he was also handed a ‘special severance payment’ worth a further £34,670. Mandelson has denied wrongdoing.