Sources from the British Foreign Office told the BBC that compensation given to Lord Mandelson after his dismissal as ambassador to the US is being reviewed.
The review was launched after new details emerged about Lord Mandelson's links to Jeffrey Epstein and a separate police investigation has been launched in the UK, Foreign Office sources said.
Police searched two houses linked to Lord Mandelson on Friday after the latest files released related to Epstein revealed an exchange of emails between the two containing confidential data on British fiscal policy. Lord Mandelson has not been arrested.
The ruling Labour Party lord is believed to have received compensation of around £55,000 after he was sacked as the UK ambassador to the US in September over his links to the late convicted sex offender.
Government sources confirmed that the Foreign Office had reached a financial settlement with Lord Mandelson, but did not specify the amount.
According to the Times, the settlement is the equivalent of three months' salary, or the £55,000 mentioned. A Foreign Office spokesman said:
„Peter Mandelson's public service was terminated in accordance with legal advice and the terms of his appointment”.