Keir Starmer was facing fresh questions about his judgment on Wednesday night after handing Peter Mandelson a pay-off worth double what he was entitled to.

Downing Street agreed a 'special severance package' worth £75,000 for the disgraced Labour grandee after he was sacked over his friendship with paedophile financier Jeffrey Epstein.

The amount was almost twice what Mandelson was contractually entitled to, but Whitehall sources said it was far less than the £547,000 he was demanding for a departure his lawyers said had 'permanently damaged [his] employability'.

Documents released to Parliament on Wednesday revealed Sir Keir was warned that Mandelson had a 'particularly close' relationship with Epstein and there was a 'reputational risk' to appointing him US ambassador.

Tory leader Kemi Badenoch called on Labour MPs to depose the Prime Minister, saying: 'There are not enough Conservative MPs to remove the Prime Minister - he won a landslide. Labour MPs now need to consider their conscience and their position and ask if this man is fit to run our country.' 

Asked if he should resign, she told Sky News: 'We can't make him resign. The only people who can fix this are Labour backbenchers.'

The documents also confirmed that Sir Keir was warned in advance that Mandelson had continued his friendship with Epstein following the financier's conviction for child-sex offences.

The Cabinet Office told the PM in writing that appointing him as US ambassador would represent a 'general reputational risk' to the Government.

Despite this, Sir Keir went ahead and appointed a man who had twice been forced to resign from the Cabinet in disgrace. Incredibly, Mandelson was briefed on top-secret documents before his security vetting had been completed.

Whitehall sources said the letter signing off Mandelson's pay-off was written by Foreign Office permanent secretary Sir Olly Robbins, who previously served as Theresa May's Brexit negotiator.

One insider also blamed Sir Olly for the extraordinary decision to brief Mandelson on secret documents before he had been vetted. However, the documents show the pay-off was agreed with the Treasury and that both Foreign Secretary Yvette Cooper and No 10 were briefed on it before it was agreed. 

Officials claimed the £75,000 golden goodbye was 'good value for money' as it would result in Mandelson leaving quickly with 'minimal fuss'. But MPs said he should have been booted out without a penny in compensation.

Mrs Badenoch said the revelations were 'yet another indictment of Keir Starmer's judgment'.

The Tory leader said: 'The fact is we wouldn't have been paying Peter Mandelson anything if Keir Starmer hadn't appointed him in the first place.

'The vetting we have now seen shows the Prime Minister should never have made this decision.

'He has not been honest with the country and Parliament about what he knew.'

The revelations emerged in the first batch of files which the Government was ordered by MPs to release last month.

The files, covering Mandelson's appointment and seven-month tenure in Washington, could eventually involve tens of thousands of documents.

The PM's chief secretary Darren Jones said Sir Keir had 'taken responsibility' for Mandelson's appointment, telling MPs: 'He has acknowledged that it was a mistake and has apologised, not least for believing Peter Mandelson's lies.'

Wednesday's release of 147 pages of documents confirmed that Sir Keir was briefed on Mandelson's long-term friendship with Epstein.

The paedophile was jailed in 2008 for soliciting a minor for prostitution. A 'due diligence' document compiled by the Cabinet Office stated that, despite this, Mandelson's relationship with Epstein 'continued across 2009-2011, beginning when (he) was business minister and continuing after the end of the Labour government'.

It noted newspaper reports that the Labour peer also stayed in Epstein's New York mansion while he was in jail in 2009.

In a separate note to the PM, officials underlined the risk of appointing such a high-profile politician, saying: 'If anything goes wrong, you could be more exposed as the individual is more connected to you personally.'

The documents suggest that the PM's then chief of staff Morgan McSweeney, who pushed for the appointment of his mentor, drew up three follow-up questions for Mandelson on his relationship with Epstein.

Sir Keir has claimed Mandelson 'lied' in response. But the questions and his responses are thought to be among a handful of documents that were withheld at the request of the police who are investigating allegations against Mandelson of misconduct in public office.

One document states that the PM's then communications director Matthew Doyle was 'satisfied with his responses to questions about contact' with Epstein.

Both Mr McSweeney and Lord Doyle were personal friends of Mandelson. Lord Doyle has since been suspended by Labour following separate revelations that he campaigned for a former Labour councillor after he had been charged with child sex offences.

Mr Jones told MPs it was now clear that the 'due diligence process fell short of what is required'.

He said Mandelson had been sacked as soon as the depth of his relationship with Epstein was revealed by leaked emails held by the US Department of Justice.

Mr Jones urged Mandelson to give his pay-off to charity, saying the sum had been agreed 'to avoid even higher further costs involving a drawn-out legal claim at (an) employment tribunal'.

But MPs questioned why the payment had been made at all. 

Shadow Cabinet Office minister Alex Burghart, said the public would be 'disgusted'.

He said the documents raised serious questions about the PM's judgment. 'The Prime Minister claims that he was lied to; he was not lied to by this due diligence document. It may be that Mandelson denied those claims, and if so, perhaps the Prime Minister was lied to, but by an inveterate liar who had been fired twice before.

'We are supposed to believe that the Prime Minister, who was once the chief prosecutor in this country, could not see through this nonsense. It beggars belief.' 

Tory MP Sir Julian Lewis questioned why the PM had pressed ahead with the appointment following the warnings about a man who had a reputation as 'one of the most slippery and sleazy characters in modern British politics'.

Mandelson's contract entitled him to three months' notice worth £40,330. But he was also handed a 'special severance payment' worth a further £34,670. Mandelson has denied wrongdoing.