Portugal Colonial - UK PM's top aide quits in scandal over Mandelson links to Epstein

"After careful reflection, I have decided to resign from the government. The decision to appoint Peter Mandelson was wrong. He has damaged our party, our country and trust in politics itself," Morgan McSweeney, Downing Street's chief of staff, said in a statement.

"I advised the Prime Minister to make that appointment and I take full responsibility for that advice," he added.

The resignation came as the foreign ministry said it was reviewing an exit payment to Mandelson, who was sacked by the Labour premier last September over his friendship with the late Epstein.

Mandelson, a pivotal figure in British politics and the Labour Party for decades, received an estimated pay-out of between £38,750 and £55,000 ($52,000 to $74,000) after only seven months in the job, according to a report in the Sunday Times.

Documents released on January 30 by the US Justice Department appear to show that Mandelson allegedly leaked confidential UK government information to financier Epstein when he was a British minister, including during the 2008 financial crisis.

The revelation has placed intense pressure on Starmer and triggered a police investigation into Mandelson, 72, for alleged misconduct in a public office.

The Foreign Office said in a statement it had launched a review into Mandelson's severance payment "in light of further information that has now been revealed and the ongoing police investigation".

Cabinet minister Pat McFadden earlier insisted Starmer should remain in office despite his "terrible mistake" in appointing Mandelson.

The close Starmer ally told broadcasters the party should stick with the prime minister.

"He (Starmer) should be realistic and accept that this has been a terrible story, that this appointment was a terrible mistake," McFadden, the Work and Pensions Secretary, told BBC television.

He said the real blame lay "squarely with Peter Mandelson", who put himself forward for the job despite knowing the extent of his relationship with Epstein.

- 'Regrets' -

Starmer's deputy, David Lammy, became the first cabinet minister to appear to distance himself from the premier, according to a report in the Sunday Telegraph.

The deputy prime minister had not been in favour of appointing Mandelson, a pivotal figure in British politics for decades, due to his known links to Epstein, the report quoted friends of Lammy as saying.

Starmer's Labour Party took power just over 18 months ago in a landslide election victory.

But it has been trailing Nigel Farage's anti-immigrant Reform UK as the government has come under fire over immigration, economic growth and the cost of living crisis.

Reform UK has led by double-digit figures in the polls for the past year.

Mandelson, also a former European Union trade commissioner, stood down from parliament's unelected upper chamber, the House of Lords, earlier this week.

The ex-envoy was one of numerous prominent figures further embarrassed by last week's latest revelations of ties to financier Epstein, who died in jail in 2019 while facing charges of alleged sex trafficking.

US officials ruled Epstein's death a suicide.

A spokesperson for law firm Mishcon de Reya, representing Mandelson, said he "regrets, and will regret until to his dying day, that he believed Epstein's lies about his criminality".

"Lord Mandelson did not discover the truth about Epstein until after his death in 2019. He is profoundly sorry that powerless and vulnerable women and girls were not given the protection they deserved," the law firm said.

Starmer paid tribute to McSweeney in a statement. It was "largely thanks to his dedication, loyalty and leadership that we won a landslide majority" in the 2024 election, he said.

"Our party and I owe him a debt of gratitude, and I thank him for his service," he added.

A.F.Rosado--PC