Sir Keir Starmer has admitted No10’s vetting process “dealt with” Lord Mandelson’s stay at Jeffrey Epstein’s house before the Prime Minister appointed the ex-New Labour Cabinet as the UK’s Ambassador to the US.

The Prime Minister faced fury from MPs in the House of Commons after recently released documents from the US Department of Justice included alleged emails and images of Lord Mandelson with Epstein.

Sir Keir was accused of being involved in a “cover-up” after being quizzed on his knowledge of Lord Mandelson’s relationship with the convicted paedophile ahead of his appointment as US Ambassador.

In the fiery exchange at Prime Minister’s Questions, Tory leader Kemi Badenoch asked: “I asked the Prime Minister a very specific question.

“Did he know that Mandelson had continued his friendship with Epstein after the conviction? He says if he knew then what he knows now, but he did know.

“In January 2024, a journalist from the Financial Times informed the Prime Minister that Mandelson had stayed in Epstein’s house even after that conviction for child prostitution.

“So did the Prime Minister conveniently forget this fact, or did he decide it was a risk worth taking?”

The Prime Minister responded by confirming No10 had knowledge of some of the details ahead of Lord Mandelson’s appointment.

Sir Keir said: “As the House would expect, we went through a process. There was a due diligence exercise and then there was security vetting by the security services.

“What was not known was the depth, the sheer depth and extent of the relationship. He lied about that to everyone for years.

“New information was published in September, showing the relationship was materially different to what we’d been led to believe.

“When the new evidence came to light, I sacked him, but we did go through a due diligence exercise. The points that are being put to me were dealt with within that exercise.”

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However, the Prime Minister also confirmed No10 will release documents relating to Lord Mandelson’s appointment.

Sir Keir, who accused Lord Mandelson of being a liar, revealed that documents would be released provided they do not risk the UK’s national security or jeopardise the criminal investigation being carried out by the Metropolitan Police.

Lord Mandelson, who resigned as a Labour member and announced he would be stepping down from the House of Lords, is also alleged to have leaked confidential information about the financial markets to Epstein.

Sir Keir said: “I’m as angry as anyone about what Mandelson has been up to. The disclosures that have been made this week on him passing sensitive information at the height of the response to the 2008 financial crash is utterly shocking and appalling.

“He has betrayed our country. He has lied repeatedly. He is responsible for a litany of deceit. But this moment demands not just anger but action, and that’s why we’ve moved quickly.

“Referring material to the police, publishing legislation so we can remove titles from disgraced politicians and stripping Mandelson of his Privy Councillorship. That is what the public expect and that is what we will do.”

However, Liberal Democrat leader Sir Ed Davey also pushed the Prime Minister on what was known about Lord Mandelson’s links with Epstein.

Sir Ed, who went on to call for a public inquiry, asked: “Can the Prime Minister tell us, given he now admits he knew about those links, before he gave such an important job to one of Epstein’s closest friends, did he think at all about Epstein’s victims?”

The Prime Minister replied: “We looked at the material. There was a process. He will understand there was then a security vetting exercise as well.

“And that’s why I started by saying all of our thoughts are with the victims of Epstein.

“He is right at the beginning of his question to express anger at the material that has recently come out in relation to sensitive information in the aftermath of the ’08 crash. And that is why yesterday working with the Cabinet Secretary we referred material to the police.”

Sir Keir is expected to release documents pertaining to Lord Mandelson’s appointment later today, Cabinet Minister Nick Thomas-Symonds confirmed.

Meanwhile, Mrs Badenoch has tabled a humble address motion in the Commons, an arcane parliamentary mechanism to compel the Government to release documents, including due diligence work carried out by the Cabinet Office.

Labour responded by tabling an amendment agreeing to release the papers except for anything which would jeopardise security or diplomatic ties.

Sir Keir’s chief of staff, Morgan McSweeney, is also under pressure over the scandal.

The Irishman, who was a close ally of Lord Mandelson, retains the Prime Minister’s “full confidence”.