Foreign Secretary Yvette Cooper has said Lord Mandelson's emails to Jeffrey Epstein were vile and make her angry.
Speaking to Sky News' political editor Beth Rigby in Ukraine, Ms Cooper said the former Labour peer should "never have been appointed" as the UK's ambassador to the US.
He was sacked in September after it emerged he had continued contact with financier Epstein after his conviction for paedophilia.
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Lord Mandelson was arrested on Monday on suspicion of misconduct in public office regarding his time as business secretary in the 2000s, and was questioned by Metropolitan Police detectives for eight hours before being released on bail just after 1am on Tuesday morning.
Police had previously searched the peer's two homes in Wiltshire and in Camden, north London.
He has previously denied any wrongdoing.
One of the emails released by the US Department of Justice reveals Epstein replying to Lord Mandelson asking how being free from jail felt, by saying "she feels fresh, firm and creamy", with the peer then calling him a "naughty boy".
Ms Cooper told Beth Rigby the emails are "just vile" and said "it just makes me so angry".
She added: "I removed Peter Mandelson from being the ambassador to the US in my first week as foreign secretary.
"I've made my view clear, as has the prime minister, he should never have been appointed as the ambassador to the US."
Ms Cooper was made foreign secretary six days before Lord Mandelson was sacked on 11 September 2025.
Sky News captured the moment Lord Mandelson was seen leaving a police station in London, and he was photographed arriving back in Camden at about 2am.
The former Labour minister has been accused of passing sensitive information to Epstein during his time as business secretary from 2008 to 2010, when Gordon Brown was prime minister.
His arrest came four days after the King's brother, Andrew Mountbatten-Windsor, was also arrested on suspicion of misconduct in public office over his links to Epstein. He was released the same day and remains under investigation.
Lord Mandelson, 72, was sacked as the UK ambassador to the US in September 2025 over his links to Epstein, a role he had only taken up in February, having been appointed by Sir Keir Starmer the previous year.
Downing Street said he was dismissed after new information emerged about the extent of his relationship with the billionaire.
He had featured in documents published by a US Congress committee, and politicians in Washington have since urged him to answer questions as part of their own investigation into Epstein.
Lord Mandelson resigned from the House of Lords in early February amid growing public and political scrutiny after the US Department of Justice's latest publication of the Epstein files last month.
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