Starmer battles for future after apology over Mandelson appointment with Rayner 'ready to become PM'

Rivals of the Prime Minister, including his ex-deputy Angela Rayner, are said to be mulling over a leadership bid to replace him in Downing Street after he faced intense criticism for appointing Mandelson.

The Daily Mail reports that the MP for Ashton-under-Lyme has amassed a £1 million war chest to fight a leadership campaign - but friends have told the newspaper that she would wait until after Sir Keir Starmer resigns to throw her hat into the ring.

Rayner broke from the Government to demand that files related to Mandelson's vetting be released to Parliament's Intelligence and Security Committee, in what has been interpreted by some as a direct challenge to Starmer's authority.

It means senior government figures are preparing to hand over their electronic communications with the former US ambassador ahead of the release of evidence.

Allies of Ms Rayner have told reporters that after the bombshell intervention, she told supportive MPs: "I will be ready".

Read More: Starmer facing fresh questions over vetting of ex-communications chief who campaigned for paedophile

Read More: Starmer apologises to Epstein victims | LBC callers react

But despite reported leadership ambitions, she may be forced to wait to launch her bid amid an ongoing HM Revenue and Customs investigation into the purchase of an £800,000 flat in Hove, East Sussex, which brought about her resignation.

Rayner stood down as Deputy Prime Minister, Deputy Leader of the Labour Party, and Housing Secretary in September after it was revealed that she had not paid stamp duty on the purchase of the seaside bolthole.

She has been under investigation by tax authorities since September, but an end to their probe is not yet in sight.

While she is understood to be ready to pay the £40,000 stamp duty she reportedly owes, she cannot clear it until HMRC decides whether to impose an additional penalty.

Allies have told The Telegraph that the looming judgment may force the former Housing Secretary to stay her hand despite Starmer's political turmoil.

While several of his MPs publicly suggested Sir Keir would need to consider his position, including John McDonnell, Barry Gardiner and Rachael Maskell, others have privately expressed doubts about the success of such a move without an obvious challenger.

Labour MP Kim Johnson told LBC News: “We need to be getting on and undertaking the challenges of this country. We know that many people are suffering as a result, the cost-of-living crisis. And this is what we should be focusing on, not about this awful man, Mandelson, and what he did and what he's been able to get away with for a long time.

“He should never have been elected and put in that position as the ambassador. Lots of people knew about his relationship with Mandelson for a very long time. And when Starmer says that he didn't know that he'd lied to him, I would have to say I find that hard to believe.”

In an impassioned speech on Thursday, the Prime Minister spoke out strongly over "lies" told by Peter Mandelson about his association with convicted paedophile Jeffrey Epstein.

The Prime Minister described how no one was fully aware of the "darkness" of Mandelson’s ties to the disgraced financier.

“It had been publicly known for some time that Mandelson knew Epstein. But none of us knew the depth and the darkness of that relationship. What has come to light has raised serious questions, information that was not known at the time of his appointment,” said Sir Keir.

“The information now available makes clear that the answers he gave were lies. He portrayed Epstein as someone he barely knew. And when that became clear, and it was not true, I sacked him.

“Such deceit is incompatible with public service. Let me be clear, no one is above accountability, and no one, however well-connected, however experienced, however senior, should hold public office if they cannot meet the basic test of honesty.”

Despite political pressure from within his party, Sir Keir is also resisting calls to sack his Chief of Staff, Morgan McSweeney, who is known to have advocated for the appointment of Lord Mandelson in 2024.

Many expressed a lack of confidence in the Prime Minister's No 10 team and pointed to Downing Street chief of staff Mr McSweeney, whom they blame for his ally Lord Mandelson's appointment last year as the UK's ambassador to the US.

One Labour MP told the Press Association that WhatsApp chats among backbenchers that are usually animated have gone "eerily quiet," that the mood is "sombre", and suggested this could signal plotting behind the scenes.

They said Mr McSweeney has "got to go", and they were "really disappointed" that he has not already been fired.

Neil Duncan-Jordan said there was a "loss of trust and confidence in the No 10 operation" and Mr McSweeney is "clearly part of the problem".

The Labour MP for Poole said: "The Mandelson affair is just the latest, and probably biggest, issue, but it's not the first, and if things don't change, it's unlikely to be the last."

Labour MP for Alloa and Grangemouth, Brian Leishman, told LBC that Mr McSweeney had to go. Asked whether Sir Keir would survive, he said: "It's a long way back for him."

Karl Turner, Labour MP for Hull East, said he wanted the Prime Minister to "make changes" rather than step down, voicing concerns that Sir Keir's position would become "untenable" if he kept his Chief of Staff.

Former deputy Labour leader Baroness Harriet Harman warned that unless the Prime Minister took the right course of action, the scandal would "finish him off".

One Labour MP said Mr McSweeney "needs to go, he's a total liability and like Mandelson is only interested in himself".

The MP added: "I think the PM doesn't have much time left and sadly, he has nobody but himself to blame."

There was also anger about Downing Street's attempt to control the release of potentially explosive documents providing insight into how the decision was made.

Helena Dollimore, who represents the constituency of Hastings and Rye in which Sir Keir gave Thursday's speech, said it showed his commitment to "accountability".

"I know everyone in the room today felt just how angry the Prime Minister is - and all of us in the Labour Party are - at the lies we were told by Peter Mandelson," she told reporters.

"People heard very loudly that the PM is on the side of women and girls and his commitment to making sure there's accountability, because that's what Epstein's victims deserve."

During the speech, the Prime Minister also apologised to victims of Jeffrey Epstein for having believed Lord Peter Mandelson's lies and appointing him Britain's ambassador to the US.

He said: "The victims of Epstein have lived with trauma that most of us can barely comprehend, and they've had to relive it again and again."

He said they had seen accountability "delayed and too often denied".

"I want to say this. I am sorry, sorry for what was done to you, sorry that so many people with power failed you. Sorry for having believed Mandelson's lies and appointed him, and sorry that even now you're forced to watch this story unfold in public once again.

"But I also want to say this: in this country, we will not look away, we will not shrug our shoulders, and we will not allow the powerful to treat justice as optional. We will pursue the truth.

"We will uphold the integrity of public life, and we will do everything within our power and in the interests of justice to ensure accountability is delivered.

"That is what the public expects. That is what the victims deserve, and it is what I will do."

Nigel Farage weighed in on the apparent civil war within the Labour Party, telling LBC that Starmer "won't stand down voluntarily, quickly. But I very much doubt he'll be there in three or four months time."

Kemi Badenoch told LBC that there was ‘more to come’ in the Mandelson scandal.

The Tory leader told LBC: "There's more to a situation than meets the eye.”

Ms Badenoch added that the PM "is going to get into all sorts of trouble” as more revelations come to light.

“There are more details that will come out which they would rather were not in the public domain,” Ms Badenoch told Nick.

She said she was "gobsmacked” to learn that Sir Keir was aware of Mandelson’s ties to Epstein when appointing him, adding: “I always had a strong suspicion that he did know, but I didn't think we would get that information until we saw all of the papers.”

It comes after the Prime Minister was forced to hand over all files about Mandelson's security vetting to Parliament for release to the public as pressure mounted.

Ms Badenoch said: “I think that those papers are going to show all sorts of terrible decision-making and bad judgement by the Labour government. I think Keir Starmer is only going to get into more trouble.”

She added that the scandal will also topple Mr McSweeney, Starmer’s top aide.

"I think Morgan McSweeney is probably toast. I'm amazed he's still in the job. He was Peter Mandelson's protege. He was the one who pushed for this appointment and must have seen all of the vetting,” Ms Badenoch said.