Lord Mandelson sought more than half a million pounds as a payoff when he was dismissed as Britain’s ambassador to the United States last September, newly released documents have revealed.
Newly released files show that Mandelson formally requested the government “pay out the remainder of the 4-year salary costs of the fixed term appointment” following his dismissal by Sir Keir Starmer — a sum that would have amounted to £547,201.
The request was rejected. Instead, Mandelson received a total of £75,000, made up of £40,330 in pay in lieu of notice covering the three-month notice period stipulated in his contract, plus an additional £34,670 severance payment.
The document, dated 30 September 2025 — almost three weeks after Mandelson was fired — noted at the top that a decision was needed “as soon as possible” given that Mandelson “remains on FCDO payroll,” with officials warning that “swift agreement to the special severance package will allow the organisation to conclude the appointment without further delay or cost.”
The gap between the £547,201 figure requested and the £75,000 ultimately awarded represents one of the most significant disparities in a British diplomatic severance settlement in recent memory. The government’s decision to release the documents means the full scale of Mandelson’s initial demand is now a matter of public record, with the Foreign Office’s handling of his departure now subject to further scrutiny.
