Keir Starmer’s government of “scandal and crisis” is incapable of leading Britain in the face of economic turmoil and threats from Russia, Kemi Badenoch has warned. The Conservative leader said the Prime Minister “is distracted from the real and growing challenges our country faces” as the Peter Mandelson scandal added fuel to a growing civil war within the Labour Party.

Labour insiders said Lord Mandelson was “very angry” about his sacking as ambassador to the US over his friendship with sex offender Jeffrey Epstein – and would attempt to salvage his reputation by shifting the blame on to Sir Keir. The Prime Minister faces questions about how much he knew about Lord Mandelson’s friendship with Epstein before the appointment was made, and about concerns reportedly raised by Britain’s security services.

Attention is also focusing on the role of Morgan McSweeney, Sir Keir’s chief of staff in Number 10, who is said to have pushed for Lord Mandelson to get the US job and resisted calls for his dismissal. Reform UK leader Nigel Farage said: “It is about the Prime Minister’s judgment but it’s also about the role that Morgan McSweeney plays in this government.”

Downing Street last night insisted the Prime Minister still had confidence had in his “top team”, as Sir Keir prepared to welcome US President Donald Trump to the UK in next week’s state visit.

Ms Badenoch highlighted poor economic growth, potential tax rises in November’s Budget and fears for Europe’s security after Russian drones entered Polish airspace this week. She said: “We are saddled with a weak Prime Minister, who consistently displays bad judgement, and is more concerned with his party than our country. Meanwhile, people are struggling with the rising cost of living.”

Number 10 has accused Lord Mandelson of failing to reveal the full truth about his friendship with Epstein before he was given the job of representing the UK in the White House.

Leaked emails show that Lord Mandelson, a former Labour cabinet minister, told Epstein to “fight for early release” shortly before the US financier was sentenced to 18 months in prison in 2008 for soliciting prostitution from a minor.

Scottish Secretary Douglas Alexander said: “If Keir knew then what he knows now, he would not have made that appointment.”

But Lord Mandelson is insisting that he provided full details during the vetting process. A Labour colleague who knows him well told the Express: “He is very angry. He will definitely intimate, in his own subtle way, that actually everything was on the table, that people did know everything, that people did have their eyes wide open when they appointed him.

“He has the potential to cause quite a lot of trouble. His problem now is that he has been thrown under the bus.

“He will have two objectives now. One is to send a warning to Number 10 and others, for there not to be a pile on. He won’t want to be going any further under a bus.

“And second, he will be trying to ensure he doesn’t suffer so much damage to his reputation that it’s impossible for him to do anything in the future.”