Newly released government documents show Lord Peter Mandelson received a £75,000 taxpayer-funded payout after his contract as UK ambassador to the US ended. The payout consisted of £40,329.50 in lieu of notice and £34,670.50 as a special severance payment.

Lord Mandelson first requested full payout of his contract, exceeding £500,000. The Treasury approved the lower amount. A Foreign Office HR email from Alice McCullough on October 16 praised Mark Power for reducing the settlement with little difficulty.

Lord Mandelson served as ambassador from December 2024 until dismissal in September 2025. Chief Secretary to the Prime Minister Darren Jones told MPs the initial full payout request was inappropriate. Jones stated the government settled to avoid higher costs from a potential employment tribunal claim.

A due diligence document from December 2024 noted public reports of Lord Mandelson's contacts with Jeffrey Epstein after Epstein's 2008 conviction. The reports covered 2009 to 2011, including a stay at Epstein's house in June 2009 while Epstein was jailed.

Further details on the relationship emerged after releases by Bloomberg and the US Department of Justice. The Prime Minister concluded Lord Mandelson provided inaccurate information about the relationship. Some documents remain withheld due to a Metropolitan Police investigation into misconduct in public office allegations.

Lord Mandelson was arrested on February 23 on suspicion of misconduct in public office related to passing sensitive information to Epstein during his business secretary tenure. He was bailed and later released from bail conditions but stays under investigation.

MPs ordered release of the initial documents via a humble address motion. Shadow chancellor of the Duchy of Lancaster Alex Burghart called for full file disclosure and repayment of the payout.