Peter Mandelson "admitted he continued his relationship with the paedophile Jeffrey Epstein for many years during his vetting interview.
The former senior Labour adviser was sacked as the UK Ambassador to the US on Thursday morning, less than 24 hours after the Prime Minister defended him in the Commons.
Allies of Mandelson said he told interviewers in the vetting process that he had carried on his relationship with the notorious paedophile for many years and deeply regretted doing so.
Lord Mandelson’s sacking came after emails showed "the depth and extent of Peter Mandelson’s relationship with Jeffrey Epstein is materially different from that known at the time of his appointment", the Foreign Office said.
He was reported to have told Epstein to "fight for early release" shortly before he was sentenced to 18 months in prison, and told him "I think the world of you" the day before the disgraced financier began his sentence for soliciting prostitution from a minor in June 2008.
Lord Mandelson’s friendship with Epstein had been known about, but Bloomberg and The Sun published emails showing that the relationship continued after his crimes had emerged.
One cabinet minister told The Times: "It was obvious from the start that he [Mandelson] was the wrong choices...It was just a matter of time. It’s so damaging."
Several Labour MPs openly took aim at the Prime Minister's handling of the scandal.
Keir Starmer is under pressure over the appointment
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Liverpool Wavertree MP Paula Barker, who initially stood for the party’s deputy leadership, criticised the “delay” in dismissing Mandelson.
She said: "The delay in sacking him has only served to further erode the trust and confidence in our government and politics in the round...We must be better."
Lord Mandelson’s deputy, James Roscoe, will be the interim ambassador to the US and has taken over with immediate effect.
The Conservatives called for full disclosure on who in Downing Street knew what about Lord Mandelson’s links with Epstein, while the Liberal Democrats demanded a review of vetting procedures.
Paula Barker said 'we must be better' following the scandal
| PAShadow Duchy of Lancaster Alex Burghart told GB News: "There are huge questions for everyone involved.
"It had become clear overnight the vetting process did throw up a whole load of problems with the appointment.
"It's incredibly unlikely PM and his team wouldn't have known what we all know now and they still appointed him.
"We're calling on the PM and the Government to publish all this stuff right now and get it on the table."
Green Party Leader, Zack Polanski, said: "Starmer’s instinct was to stand by Peter Mandelson, despite the evidence. His resignation now isn’t a matter of principle; it’s simple political expediency.
"It’s a symbol of a broken politics where the same insiders always fail up.
"How long until Mandelson ends up in a high-paid consultancy somewhere? While another washed-up former Westminster insider ends up in Washington?
"His resignation, like his original appointment, is a sign of a dirty, broken political system."
Shadow Duchy of Lancaster Alex Burghart says there are 'huge questions' for the Prime Minister | GB NewsNigel Farage also suggested Sir Keir Starmer "ignored the warnings" about Lord Peter Mandelson, who was sacked from his role as ambassador to the US earlier this week.
Lord Mandelson was removed from his post after emails emerged in which the peer offered support to Epstein even as he faced jail for sex offences.
Speaking as part of a Reform UK press conference in Caerphilly, Mr Farage said: “I’m not saying Mandy has done a bad job over there but I think we have the good fortune of a pro-British presidency.
"Look, Peter Mandelson, he’s a very clever bloke, he’s a very knowledgeable bloke. But, clearly, he does have one or two demons. Twice before he’s been removed from Cabinet. This is the third time he’s been removed."
Calum Miller, pictured here with Sir Ed Davey, has called for scrutiny over the next Ambassador
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The Liberal Democrats have called for the Commons Foreign Affairs Committee to scrutinise the next US Ambassador.
The party's foreign affairs spokesman Calum Miller said: "The Prime Minister’s appointment of Mandelson was a clear error of judgment, a mistake that we cannot afford to let him repeat.
"With Trump in the White House, we need an ambassador who will stand up to the president and represent British values.
"To avoid further national embarrassment for our country on the international stage, the Foreign Affairs Committee must now have a role in scrutinising Mandelson’s successor before they are appointed."