By David Hughes

Peter Mandelson is facing demands to hand back the payoff he received after being sacked as Britain’s ambassador to the US, a sum which could run into the tens of thousands of pounds.

The British peer was sacked over his relationship with pedophile financier Jeffrey Epstein, but anger in Westminster has intensified after the latest release of documents which indicated he leaked information to his friend while he was a government minister.

Allies of Labour Prime Minister Keir Starmer said the peer should give the taxpayer-funded handout back or donate it to a victims’ charity.

The Foreign Office said a review had been launched “in light of further information that has now been revealed”.

The taxpayer-funded payoff he received after being dismissed in September last year could be as high as stg55,000 ($A106,780) before tax and deductions, the Sunday Times reported.

Starmer is fighting for his future amid questions over his judgment in appointing Mandelson to the role.

Full details about Mandelson’s payoff, after being thrown out after just seven months in the Washington role, will be disclosed to parliament after MPs backed a call for disclosure of papers relating to his time in the government.

But the Sunday Times suggested the figure could be between stg38,750 ($A75,232) and stg55,000 ($A106,780).

A No 10 source told the Press Association: “Given what we know now, Mandelson should either pay the money back or give it to a charity to support victims.”

Health Secretary Wes Streeting, a potential successor to Starmer said Mandelson should “certainly” hand back the money.

The Metropolitan Police said its investigation into Mandelson, 72, over alleged misconduct in public office would “take some time” after officers finished searching his homes.

The damage caused to Starmer’s position by the Mandelson row has fuelled speculation about a possible leadership contest.

A poll by Opinium indicated that more than half, 55 per cent of British voters, thought Starmer should quit as Labour leader, with just 23 per cent saying he should remain.