Starmer insists he has confidence in Mandelson as relationship with Epstein faces scrutiny

Prime Minister Sir Keir Starmer has insisted he still has confidence in Peter Mandelson as the diplomat's relationship with disgraced financier Jeffrey Epstein faced new scrutiny.

Lord Mandelson, the UK ambassador to the US, faced questions on Tuesday after it emerged he had referred to Epstein as his "best pal" in a birthday message he wrote for the convicted sex offender in 2003.

Further allegations were made by The Telegraph overnight, claiming Epstein had brokered a deal with Lord Mandelson over the £1bn sale of a UK taxpayer-owned banking business in 2010. This was reportedly negotiated while Lord Mandelson was the business secretary, and only months after Epstein had been released from prison.

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There were also claims that Lord Mandelson stayed in Epstein's New York home while he was in prison for soliciting a minor in 2008/9.

Kemi Badenoch, the Conservative leader, has called for Lord Mandelson to lose his job in the wake of the allegations, claiming his position has become "untenable".

During Prime Minister's Questions on Wednesday, Ms Badenoch asked Sir Keir whether he has confidence in the ambassador.

The prime minister insisted that he does, saying Lord Mandelson is "playing an important role in the UK-US relationship".

Referring to Epstein, the prime minister said: "He was a despicable criminal who committed the most heinous crimes and destroyed the lives of so many women and girls.

"The ambassador has repeatedly expressed his deep regret for his association with him. He's right to do so."

Sir Keir also claimed that "full due process" was followed in the appointment of Lord Mandelson "as would be expected".

In an interview with The Sun, Lord Mandelson said he regrets "very much that I fell for his lies... and accepted assurances he had given me about his indictment", which saw Epstein jailed in 2008.

Lord Mandelson said: "He's a charismatic, criminal liar we now see, and I regret very much indeed.

"I felt it like an albatross around my neck since his death in 2018 or 2019, whenever it was. I feel a tremendous sense of regret."

This regret, the diplomat said, is not only that he met Epstein in the first place, but that he "continued that association" and took at "face value the lies that he fed me".

Lord Mandelson went on to suggest there are further email exchanges between himself and Epstein that "we know are going to surface". However, he said he does not believe he is named in the Epstein files.

The diplomat said: "We know they're going to come out, we know they're going to be very embarrassing. And they know that I'm being profoundly to regret ever having met him and being introduced to him in the first place.

"But I can't rewrite history. What I can do is express my profound sympathy for those who treated by him."

Lord Mandelson and No 10 have both been contacted for comment on the latest allegations.