Peter Mandelson has made things go from bad to worse for Keir Starmer

A week into the row over Peter Mandelson’s friendship with convicted sex offender Jeffrey Epstein, Keir Starmer’s grip on his premiership is improbably damaged.

So what? It’s improbable because Starmer won a landslide majority a little over a year ago. And yet the prime minister and his chief of staff Morgan McSweeney are

• fighting to keep their jobs and the government show on the road;
• enduring public attacks from colleagues, political rivals and the world’s richest man, and;
• anticipating the possibility Donald Trump, arriving on a state visit with questions over his own relationship with Epstein, leaves the UK angry at being caught up in further scandal.

When? Much of the focus is on what Starmer and McSweeney knew and when about Mandelson, with journalists poring over the timetable of events leading up to the sacking of the UK’s ambassador to the US.

Who? Mandelson’s charm may well have won over the Trump administration and softened the blow from the president’s chaotic imposition of tariffs, but business figures told The Observer it was only a partial success. “It’s less shit than it could have been without him but that’s not the same as it being good,” one senior business adviser said.

Why? The PM is also dogged by questions about why a man known as the “Prince of Darkness” was ever appointed. Mandelson was an architect of New Labour, but sacked from government twice. Well-placed sources told The Observer that

• No 10 asked the Cabinet Office’s ethics team, which advises on standards for certain appointments, to carry out due diligence, but that it was a “desktop exercise only”;
• the team compiled a dossier of potential red flags from publicly available information, including Mandelson’s relationship with Epstein, and his commercial interests; and
• the dossier was handed to Number 10, who discussed it with Starmer and McSweeney.

“The crunchier end of it was done directly by Morgan with Mandelson, as it should be for what was a political appointment,” one source said.

View from No 10. Downing Street has so far insisted that Mandelson’s birthday book message and the supportive emails questioning Epstein’s conviction revealed a “materially different” relationship between Mandelson and Epstein than had been previously known. “No one can say that relationship had been accurately characterised,” one source said.

Not convinced. Many within Labour feel differently. Beyond Westminster, White House sources said that Mandelson’s appointment “makes you guys look really, really bad”.

Those commercial interests. Labour peer Mandelson may face a parliamentary investigation after The Observer yesterday revealed he held a previously unknown meeting with a minister, publicly registered as being held with his lobbying firm Global Counsel.

And the rest. Labour MPs are not just furious about Mandelson, but also

• the government’s handling of flashpoint issues such as Gaza, child poverty and welfare;
• policy “drift” and weak communications resulting in disastrous opinion polls; and
• the bungled phase two reset and reshuffle, which one government figure said had resulted in a whips office occupied by those with personal links to No 10.

Burnham ambition. Labour is typically more reluctant than the Tories to indulge in “regicide” but the plot to bring the soft-left pretender Andy Burnham back to the Commons is under way, with suspended MP Andrew Gwynne’s Greater Manchester seat seen as the best route.

Others are sceptical. Just 14 months after Labour’s election victory, there is almost no such thing as a safe seat. Standing and losing could end Burnham’s political career. Some MPs also believe the timing, unlikely to occur before next spring, may be too slow.

What’s more… This month’s party conference, November’s budget and the return of welfare reform all have the ability to bring simmering tensions further to the boil. For some the question has rapidly shifted from if Starmer may go, to when.