Lord Mandelson declared he will quit the House of Lords today after Keir Starmer threatened to change the law to kick him out.
The dramatic news – effective from tomorrow – was announced by the Lord Speaker following days of building pressure from all sides.
But the New Labour architect is still facing the threat of a police probe into leaking UK secrets to Jeffrey Epstein.
Downing Street said material connected to the extraordinary trove of emails between the peer and the paedophile financier had been ‘referred’ to Scotland Yard.
Sir Keir told Cabinet earlier that he was ‘appalled’ by the revelations and the apparent forwarding of sensitive internal discussions about the Credit Crunch was ‘disgraceful’.
He warned ministers that although Lord Mandelson’s behaviour was ‘gobsmacking’ he was ‘not reassured the totality of the information had yet emerged’.
Sir Keir also said he would act ‘legislatively if necessary’ to remove Lord Mandelson from the Upper House. A law was being drafted that could also strip his title, with ‘nothing off the table’.
Lord Mandelson is now intending to retire from the House, but will still be able to refer to himself as ‘Lord’ unless legislation is passed.
Lord Forsyth of Drumlean, the Lord Speaker, told peers this afternoon: ‘Given the public interest and for the convenience of the House, I have decided to inform the House that the clerk of the parliaments has today received notification from Lord Mandelson of his intention to retire from the House effective from 4 February.
‘I will formally notify this to the House tomorrow in the usual way.’
Keir Starmer is struggling to contain the storm over Lord Mandelson today as he pledged ‘support’ for a police probe into alleged leaks of government secrets
A photograph released as part of the Epstein files shows Lord Mandelson in his underwear talking to a woman who is wearing a white bath robe
The tranche of documents includes an email seemingly from Lord Mandelson to Epstein, talking about the UK government having ‘saleable’ assets
The 2009 memo highlighted that the government was looking to get investment moving
The memo made clear that the government was looking to sell off assets to avoid tax hikes
It is understood the Cabinet Office did an ‘initial assessment’ after the latest tranche of evidence was released by the US on Friday.
After reviewing the original email chains officials found they contained ‘market sensitive’ information and details of the government response to the crisis. Strict handling controls were in place and they concluded ‘safeguards were compromised’.
As a result the government proactively contacted the Metropolitan Police to alert them to the issues.
The force has confirmed it is looking into allegations the ex-Cabinet minister committed misconduct in public office, but has not yet launched a formal investigation.
Lord Mandelson has insisted that nothing in the Epstein files shows he broke the law.
MPs have been ramping up pressure on Sir Keir to find a way of stripping Lord Mandelson of his peerage – as well as removing him from the privy council that advises the King.
However, the New Labour architect – who was appointed as US ambassador by the PM barely a year ago – has sounded defiance in an interview. He insisted he was simply ‘too trusting’ of Epstein and denied that his career in public life is over.
The extraordinarily close ties between Lord Mandelson and Epstein – which continued long after he was jailed for sex offences – have been further exposed after the US released another massive tranche of evidence.
Journalists have been sifting through more than three million new documents, with Lord Mandelson mentioned nearly 6,000 times.
They appear to show that the peer passed on highly sensitive advice given to then-PM Gordon Brown at the height of the Credit Crunch.
It included emails with key Downing Street aides and ministers discussing a proposed £20billion of asset sales to shore up the public finances, as well as Labour‘s tax policy plans.
The information would have been valuable to any bank or financial institution. The document was forwarded by Lord Mandelson to Epstein with the comment: ‘Interesting note that’s gone to the PM.’
Another email saw Lord Mandelson give Epstein advance notice of a €500billion bailout of the Eurozone, potentially allowing him to cash in ahead of the deal being formally announced the following day.
Lord Mandelson also tipped off his friend the night before Mr Brown resigned from No10.
The evidence also features bank statements appearing to show Epstein sending Lord Mandelson tens of thousands of dollars in 2003-2004, although the peer has questioned whether they were real.
The disgraced financier – who committed suicide in prison – also seems to have helped Lord Mandelson land a lucrative job after leaving government, and paid £10,000 for his partner Reinaldo to do an osteopathy course.
Addressing the weekly Cabinet meeting this morning, Sir Keir said he was ‘appalled’ by the new information that had emerged and Lord Mandelson had ‘let his country down’.
A Downing Street readout said the premier branded the alleged passing on of emails about ‘highly sensitive’ government business ‘disgraceful’.
Ominously, he added that he was ‘not reassured that the totality of the information had yet emerged’.
‘The Prime Minister told Cabinet that Peter Mandelson should no longer be a member of the House of Lords or use the title and said that he had asked the Cabinet Secretary to review all available information regarding Mandelson’s contacts with Jeffrey Epstein during his time serving as a government minister,’ the readout went on.
‘He said he had made it clear the government would cooperate with the police in any inquiries they carried out.
‘But he said the government had to press and go further, working at speed in the Lords, including legislatively, if necessary.’
Sir Keir warned that ‘for the public to see politicians saying they can’t recall receiving significant sums of money or not was just gobsmacking – causing them to lose faith in all politicians and weaken trust still further’.
The PM’s spokesman dodged on whether Sir Keir had been aware of Mr Brown’s demands for a full inquiry in September, when he was still voicing confidence in Lord Mandelson as US ambassador.
A clearly furious Mr Brown said yesterday: ‘I have asked the Cabinet Secretary to investigate the disclosure of confidential and market sensitive information from the then Business Department during the global financial crisis.’
He also revealed that on September 10 last year – the day Sir Keir said he had ‘confidence’ in Lord Mandelson as the Epstein scandal swirled once again – he wrote to the Cabinet Secretary, calling for an investigation into the peer.
However, after two months he was told no records could be found, with Mr Brown questioning the ‘intensity’ of the efforts to identify wrongdoing.
Baroness Harman today joined calls for Lord Mandelson to be removed from the Privy Council and prevented from returning to the House of Lords.
She told BBC Radio 4’s Today programme she believes Labour’s manifesto pledge to remove disgraced members from the House of Lords will be ‘got on with’, adding: ‘In the meantime, I think the Prime Minister could be advising the King to stop him from being a privy counsellor.
‘And I also think that, he’s on leave of absence, at the moment, from the House of Lords, having stepped out of the House of Lords to be our ambassador, and I think it would be good for the Lords to pass a motion to say that he’s not to reapply to come back in.’
Other MPs have insisted Sir Keir must pass a law to remove Lord Mandelson’s peerage – something that has rarely been done. He is currently on a voluntary leave of absence from the House, and has resigned his Labour Party membership.
Sir Keir’s chief of staff and closest aide Morgan McSweeney is under intense scrutiny over his role in championing Lord Mandelson’s disastrous appointment as US ambassador.
The Metropolitan Police received referrals from both Reform UK and the SNP asking detectives to investigate the peer, who on Sunday quit the Labour Party to avoid causing ‘further embarrassment’.
The force said last night that detectives were reviewing them to ‘determine if they meet the criminal threshold for investigation’.
Lord Mandelson tipped off his friend Epstein the night before Gordon Brown (left) resigned from No 10
A Government spokesman said: ‘It is rightly for the police to determine whether to investigate and the Government stands ready to provide whatever support and assistance the police need.’
Downing Street earlier said Sir Keir had asked Cabinet Secretary Chris Wormald to conduct ‘an urgent review’ looking at ‘all available information regarding Mandelson’s contacts with Epstein during his period as a government minister’.
In his Times interview published last night, Lord Mandelson claimed that he was ‘too trusting’ of Epstein, who he described as ‘muck that you can’t get off your shoe… Like dog muck, the smell never goes away’.
But he made it clear he has no intention of disappearing from public life, saying: ‘Hiding under a rock would be a disproportionate response to a handful of misguided historical emails, which I regret sending.’
And he said none of the Epstein files ‘indicate wrongdoing or misdemeanour on my part’ as he refused to give evidence to a US Congress inquiry.
