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Morgan McSweeney has dramatically quit as Sir Keir Starmer's chief of staff, after mounting scrutiny over his role in Lord Mandelson's appointment as the UK's ambassador to the US.
The PM's adviser had been coming under pressure after pushing for the former minister to be given the job, despite the peer's relationship with convicted sex offender Jeffrey Epstein being publicly known about at the time.
McSweeney said he did not oversee the vetting but wanted to take "full responsibility" for advising the prime minister to appoint him.
It leaves Sir Keir battling to shore up his premiership as he continues to face anger from Labour MPs over his decision to hire the peer for the Washington role.
Sir Keir sacked Lord Mandelson in September, after emails emerged showing he sent supportive messages to Epstein as he faced charges for sex offences.
But further revelations this week from the latest release of Epstein files in the US, about his continued contact with the late disgraced financier after his conviction in 2008 have led to fresh fury within Labour over the decision to hand him the role.
Emails suggesting the peer leaked sensitive government information to Epstein whilst a minister in the last Labour government have also prompted a police investigation into alleged misconduct in public office.
Sir Keir has said Lord Mandelson's prior relationship was Epstein was flagged when he was vetted for the role, whilst insisting the former cabinet minister misled him about the depth of the relationship.
But it has failed to contain a spiralling row over the decision, with a handful of Labour MPs now openly calling for Starmer to resign as party leader.
In a statement on Sunday, McSweeney said Lord Mandelson's appointment in December 2024 had been "wrong", adding he had "damaged our party, our country and trust in politics itself."
"When asked, I advised the prime minister to make that appointment and I take full responsibility for that advice," he added.
"While I did not oversee the due diligence and vetting process, I believe that process must now be fundamentally overhauled," he added.
"In the circumstances, the only honourable course is to step aside."
The statement came just hours after a key Starmer ally had dismissed calls from within Labour for Sir Keir to sack McSweeney.
Work and Pensions Secretary Pat McFadden told Laura Kuenssberg it would not make "any difference at all" to the situation facing the government.
The BBC understands Lord Mandelson's view is that he answered questions about his relationship with Epstein in the vetting process accurately.
Mandelson has not responded to requests for comment but the BBC understands his position is that he has not acted in any way criminally and that he was not motivated by financial gain.
