Keir Starmer is facing intense scrutiny over his judgment regarding the appointment and subsequent sacking of Peter Mandelson as US ambassador, particularly concerning a controversial £75,000 severance package.

This amount is almost double what Mandelson was contractually entitled to, following his dismissal over his friendship with paedophile financier Jeffrey Epstein.

Documents released to Parliament revealed that Sir Keir had been explicitly warned about Mandelson's 'particularly close' relationship with Epstein and the inherent reputational risk of appointing him as US ambassador.

A Cabinet Office document noted that Mandelson's relationship with Epstein continued across 2009–2011, even after Epstein's conviction for child-sex offences.

The document further revealed that Mandelson reportedly stayed in Epstein's New York mansion while the financier was incarcerated in 2009.

Despite stark warnings that the Prime Minister could be "personally exposed" if anything went wrong, Sir Keir proceeded with the appointment.

The £75,000 pay-off comprised Mandelson's three months' notice worth £40,330 and an additional 'special termination payment' of £34,670. Officials defended the sum as "good value for money," arguing it would ensure Mandelson's swift departure and prevent a costly employment tribunal.

Ministers have been accused of 'hiding' damaging documents, with the first batch released containing only 147 pages — over 30 of them blank — from an estimated 100,000 records believed to exist.

Key documents, including the Prime Minister's remarks on advice given and WhatsApp messages between Starmer and allies, were withheld due to an ongoing Metropolitan Police investigation.

Sir Keir's then chief of staff Morgan McSweeney, who was Mandelson's mentor, reportedly pushed for the appointment. The PM's then communications director Matthew Doyle, a personal friend of Mandelson, also stated he was "satisfied" with Mandelson's responses regarding his Epstein connections.

National security adviser Jonathan Powell flagged concerns about Mandelson's reputation, calling the appointment 'weirdly rushed'.

In an astonishing revelation, Mandelson was also briefed on top-secret documents before his security vetting had been completed.

Tory leader Kemi Badenoch called on Labour MPs to question Starmer's fitness to run the country, stating he "has not been honest with the country and Parliament."

Shadow Cabinet Office minister Alex Burghart questioned why a former chief prosecutor like Starmer could not discern the truth from an "inveterate liar who had been fired twice before."

The files also uncovered that Mandelson had pushed for then-Prime Minister Sir Tony Blair to meet Epstein in 2002, describing him as "young and vibrant" and a friend of Bill Clinton. A spokesman for Sir Tony clarified that this meeting occurred "long before his crimes were known."

After his sacking, Mandelson delayed his departure by almost a fortnight, citing the need for "veterinary certification" for his dog, Jock. He expressed his chief concern was to avoid negative press and return to the UK with "maximum dignity."

This ongoing controversy continues to raise serious questions about transparency and due diligence within government appointments.

With a police investigation underway, crucial withheld documents may not see the light of day for several years, leaving many questions about Starmer's judgment unanswered.