Lord Mandelson has quit the Labour Party after new documents released in files connected to Jeffrey Epstein revealed the New Labour Cabinet Minister received $75,000 (£55,000) from the convicted paedophile.
The ex-UK Ambassador to the US said he decided to resign his Labour Party membership to avoid causing “further embarrassment” following further revelations about his friendship with Epstein.
In his letter, Lord Mandelson to Labour’s general-secretary Hollie Ridley said: “I have been further linked this weekend to the understandable furore surrounding Jeffrey Epstein and I feel regretful and sorry about this.
“Allegations which I believe to be false that he made financial payments to me 20 years ago, and of which I have no record or recollection, need investigating by me.
“While doing this I do not wish to cause further embarrassment to the Labour Party and I am therefore stepping down from membership of the party.”
The 72-year-old, who was sacked as US Ambassador last year, featured in documents released by the US Department of Justice on Friday.
Documents suggested Lord Mandelson may have been sent three separate payments of $25,000 (£18,000) by Epstein in 2003 and 2004.
A separate document claimed his husband, Reinaldo Avila da Silva, received £10,000.
However, Lord Mandelson questioned the veracity of the documents earlier today.
The ex-New Labour Cabinet Minister said: “There are also multiple formatting errors in the documents and I would like JP Morgan to confirm on the record that they are certain these documents are authentic and that the individual cheques are also authentic.
“Until this fact-checking has been achieved I maintain my original position which is that I have no record and no recollection of ever receiving these sums and that these statements are false.”
Lord Mandelson was the MP for Hartlepool at the time the payments were allegedly made.
Emails have also suggested that Lord Mandelson remained in contact with Epstein after the financier was convicted in 2008.
Pictures included in the Epstein files appeared to depict the former UK Ambassador to the US in his underwear.
In a redacted picture, he is seen standing next to a female, whose face is not visible.
Lord Mandelson has said he “cannot place the location or the woman and I cannot think what the circumstances were”.
However, being named or photographed in the tranche of documents does not suggest any wrongdoing.
The Prime Minister was grilled on Lord Mandelson on his return from the Far East.
Sir Keir, who claimed he had confidence in Lord Mandelson before sacking him just hours later, told reporters: “In relation to Peter Mandelson, obviously, he was removed as ambassador in relation to the further information that came to light in September of last year.
“I’ve nothing more to say in relation to Peter Mandelson.”
Lord Mandelson is also under pressure to give evidence to the US Congress about his friendship with Epstein.
Sources close to the US House Oversight Committee said it was poised to issue the Labour peer with a demand to testify in Washington.
They believe Lord Mandelson may have crucial information about co-conspirators and enablers of his crimes.
Lord Mandelson, who took a leave of absence from the House of Lords to become the UK’s Ambassador to the US, has not returned to the upper chamber since being sacked.