Lord Mandelson could be in line for a substantial taxpayer-funded payout after he was sacked by Sir Keir Starmer over his relationship with the paedophile Jeffrey Epstein.
Sir Keir, who picked the Labour grandee to be the UK’s man in Washington, dramatically sacked him after the publication of emails which showed Lord Mandelson sent supportive messages even as Epstein faced jail for sex offences.
No 10 said the emails revealed “materially different” information from what was known when the peer was appointed.
But by deciding not to resign in the wake of the emails, Lord Mandelson could have to be compensated, experts have warned.
Allies of Lord Mandelson have made clear he argues that he was open about the fact of his long association with Epstein when he was vetted for the job, as UK’s ambassador to Washington.
HR staff are said to have been brought in to ensure there is legal justification for his sacking, The Times reported on Saturday, saying there were concerns in government that that Lord Mandelson did not intend to “go quietly”.
In the past senior civil servants have received large payouts after leaving government in the wake of controversy.
Sir Philip Rutnam, the former top civil servant at the Home Office, who quit amid bullying claims against Home Secretary Priti Patel, which she denies, settled his case for £340,000, official figures later showed.
And Sir Philip Barton, who had been the top official at the Foreign Office, got a voluntary exit payment of more than £260,000 after he stepped down eight months before his five-year contract was due to end.
There is speculation that as ambassador to the US, Lord Mandelson may have been on a fixed-term contract, which the government may have to compensate him for ending early.
Dave Penman, the general secretary of the FDA union which represents senior civil servants, said there was likely to be a “negotiation” over a financial package as Lord Mandelson departs government.
He said: “As an ambassador, Mandelson will have been in a different position from most civil servants as he served at the pleasure of the prime minister and could be dismissed from his role.
“But that does not mean that normal employment law can be ignored and, depending on the nature of his contract and reasons for dismissal he could be in line for compensation. This is something we have seen with other senior civil servants before who fall out of favour with ministers. While they leave their job immediately there is then a negotiation over an exit package.”
The Foreign Office have been approached for comment.
