Mandelson files: It's difficult to see how Starmer can put this right

In the end, the first drop of the Mandelson files contained neither a smoking gun nor bombshell revelation.

The most newsworthy elements in this 147-page document detailing the vetting, appointment and severance of the ex-US ambassador were the eyewatering £75,000 payoff Peter Mandelson received for being sacked - he had asked for near £550,000 - and the revelation the prime minister's national security adviser Jonathan Powell thought the process was "unusual" and "weirdly rushed".

We already knew, because the PM admitted it in the House of Commons, that Sir Keir Starmer was aware of an "ongoing relationship" between Lord Mandelson and the paedophile financier Jeffrey Epstein.

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But to see in black and white the red flags being raised in a two-page due diligence report put together by the cabinet office was damning for the PM.

Because it confirms that the PM was told the relationship between the pair was "particularly close" and continued well after Epstein was "first convicted of procuring an underage girl in 2008" for sex.

It was flagged to Sir Keir that "Mandelson reportedly stayed in Epstein's house while he was in jail in June 2009" and noted there was "general reputational risk" over his relationship with Epstein.

It warned the PM that a political appointment - Lord Mandelson - rather than a diplomatic one was more risky: "If anything goes wrong, you could be more exposed as the individual is more connected to you personally."

Concerns raised

The Mandelson files also revealed that Mr Powell, one of Sir Keir's most trusted advisers, found Lord Mandelson's appointment in December 2024 was "weirdly rushed" and that he had been "particularly cautious about the appointment".

Minutes of a call in September 2025 show that Mr Powell had "raised concerns about the individual and reputation" to Morgan McSweeney, the PM's then chief of staff, and adds: "MM responded that the issues had been addressed."

Sir Philip Barton, the Foreign Office's top civil servant at the time of Lord Mandelson's appointment, "also had reservations", according to Mr Powell.

That the report was only two pages long and didn't investigate more robustly Lord Mandelson's relationship with Epstein, raises obvious questions.

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It was only after the drop of the Epstein files by the US Department of Justice that we learned of the full depth and intimacy of the friendship.

These documents also led to the arrest of Lord Mandelson on suspicion of misconduct in public office after it emerged that he had allegedly shared confidential information with Epstein when serving in Gordon Brown's cabinet.

Lord Mandelson denies the charges.

'An inveterate liar'

For his part, the prime minister says he was repeatedly lied to by Lord Mandelson, with No 10 stressing that follow-up questions were asked of the former Labour peer in light of the due diligence, which will back up Sir Keir's account.

Frustratingly for No 10, those documents have been withheld by the Metropolitan Police as part of their investigation into Lord Mandelson in order to avoid prejudicing the investigation.

But it goes back to the central point that, given the red flags, and Mr Powell's misgivings, why Sir Keir chose to press on with the appointment.

Alex Burghardt, shadow chancellor to the Duchy of Lancaster, was excoriating as he called this out in the House of Commons on Wednesday.

"Now the prime minister claims that he was lied to. He wasn't lied to by this due diligence document. And it may be that Mandelson denied these claims.

"And if so, maybe the prime minister was lied to, but he was lied to by an inveterate liar who had been fired twice before," said Mr Burghardt across the despatch box.

"And we're supposed to believe, that the prime minister, who was once the chief prosecutor in this country, couldn't see through this nonsense. It beggars belief."

A potential powder keg

We will have to wait for further releases to get a better understanding of what the PM was told and why he took the decisions he did.

Only a small proportion of the documents - expected to run into the tens of thousands - was published on Wednesday, but Darren Jones said the government hope to publish the remainder "soon".

It will give more momentum to a scandal that is hurting Sir Keir with ministers and MPs braced for the dropping of thousands more documents that - if they pass national security clearance - will detail messages between Lord Mandelson and senior government figures for six months before his appointment, and during his time as ambassador.

It could prove a powder keg for already inflamed tensions between Washington and London over the war in Iran should delicate diplomatic communications be put into the public domain - only messages posing significant security concerns will be exempt.

And it will be parliament's intelligence and security committee, not the government, that will adjudicate on that.

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PM battling to survive

It could also raise conflicts of interest if it emerges that government correspondence was shared with Lord Mandelson before his appointment given his commercial interests in the time at Global Counsel, a lobbying firm he co-founded.

Two key figures who supported the appointment of Lord Mandelson - Mr McSweeney and the PM's former director of communications, Matthew Doyle - have left government.

But their former boss, who has been battling to survive, is now having to deal with the ongoing consequences of an appointment he clearly deeply regrets.

All of it, as one senior MP told me on Wednesday night, adds to the "general despondency" around this administration.

Sir Keir promised to clean up politics and yet he finds himself in the centre of one of the biggest political scandals this century.

He must rue the day he ever let Lord Mandelson back into government. But it's very difficult to see how he can make it right.

(c) Sky News 2026: Mandelson files: It's difficult to see how Starmer can put this right