Former prime minister Gordon Brown said the situation facing Sir Keir Starmer was “serious” and suggested the Labour leader had been “too slow to do the right things” to clean up politics in the wake of the Peter Mandelson row.
But Mr Brown backed Sir Keir as a “man of integrity” who had been “betrayed” by Lord Mandelson.
The Metropolitan Police said its investigation into Lord Mandelson over alleged misconduct in public office would “take some time” after officers finished searching his homes in London and Wiltshire.
Metropolitan Police Deputy Assistant Commissioner Hayley Sewart said: “I can confirm that officers from the Met’s central specialist crime team have carried out searches at two addresses, one in the Wiltshire area, and another in the Camden area.
“The searches were related to an ongoing investigation into misconduct in public office offences, involving a 72-year-old man.
“He has not been arrested and inquiries are ongoing.
“This will be a complex investigation requiring a significant amount of further evidence gathering and analysis.
“It will take some time to do this work comprehensively and we will not be providing a running commentary.”
Scotland Yard launched its investigation following allegations that Lord Mandelson sent market-sensitive information to the paedophile financier while he was business secretary in Mr Brown’s government during the financial crisis.
Mr Brown said he regretted giving Lord Mandelson his peerage and bringing him back into the government in 2008, adding that he felt “shocked, sad, angry betrayed, let down” when he saw the Epstein messages released by the US Department of Justice.
Sir Keir’s position is in jeopardy because of his decision to appoint Lord Mandelson as ambassador to the US despite knowing his friendship with disgraced financier Epstein continued after his conviction for soliciting a minor for prostitution in 2008.
Asked what his message was to the Labour Party about Sir Keir’s future, Mr Brown told BBC Radio 4’s Today programme: “This is obviously serious.
“I mean, there’s always speculation. It happened to me, it happened to Tony Blair.
“It happens to everybody about how their future should be gauged.
“But this is serious, and the task is very clear.
“The task is we’ve got to clean up the system, a total clean-up of the system, an end to the corruption and unethical behaviour.
“And if we don’t do it, we’ll pay a heavy price.”
Asked if Sir Keir was the right man to take the country forward, he said: “I can look in his eyes and I can see that he is a man of integrity. He wants to do the right things.
“Perhaps he’s been too slow to do the right things, but he must do the right things now, and let’s judge what he does, on what happens in the next few months when he tries to, and I believe (he) will try, to clean up the system.”
He suggested there should be US-style confirmation hearings for new government ministers and senior appointments.
He said the alleged lies told by Lord Mandelson during his appointment process as US ambassador were “not sufficient explanation for what happened”.
“There is a systemic failure to do proper vetting, to go through the proper procedures and to actually have, in my view, what should be public hearings for anybody who is going to be in a senior position representing the British government.”
A Government spokesman said action was already being taken to clean up Westminster: “Most people who enter public life do so with a strong sense of duty and to make a difference to people’s lives.
“But the shameful and disgraceful behaviour revealed this week is wholly incompatible with public service, and it is right that no one is above accountability.
“We have already strengthened the ministerial code, giving the independent adviser greater powers to launch investigations, introduced a new monthly register of gifts and hospitality, established a new ethics commission, and ensured that ministers who break the rules cannot receive severance payments.
“But Gordon Brown is right that further action is needed in light of what has emerged this week – and we have already begun urgent work on how we can do more.”
Pressure from within Labour ranks continued to mount on Sir Keir, with left winger Kim Johnson saying his position is “irredeemable”.
She told Times Radio: “I’m sorry, I must have to say that I think his position at this moment in time is irredeemable. I’m sad to say.”
Sir Keir’s former deputy Angela Rayner, who left Government last year after a row over her underpayment of stamp duty on a new property, is widely viewed as a potential successor to Sir Keir.
The Times reported that Ms Rayner had told friends she warned Sir Keir not to appoint Lord Mandelson as ambassador because of his links to Epstein, though she is said to not want to be the one who launches a challenge against the Prime Minister.
Former shadow chancellor John McDonnell, a prominent figure on the party’s left, said a “thorough cleansing process” was needed to expose the influence of Lord Mandelson and other wealthy individuals and “Labour Party members need to assert control”.
Sir Keir was “a leader who in denial looks like a rabbit caught in the headlights” while there were “deluded leadership contenders fighting like rats in a sack”, Mr McDonnell said.
The Liberal Democrats called on the Financial Conduct Authority to launch an investigation into Lord Mandelson.
In a letter to the City watchdog Lib Dem deputy leader Daisy Cooper said: “It is crucial that Mandelson is investigated to see if he or those he leaked information to profited from access to this market sensitive and confidential material.
“He and others must face criminal prosecution if they are found to have abused trading laws for financial benefit.”
The Tories have written to HM Revenue and Customs calling for an investigation into Lord Mandelson’s tax affairs after emails and bank statements in the Epstein Files suggested the peer and his husband received tens of thousands of pounds from the financier over several years, the Sunday Telegraph reported.
Tory chairman Kevin Hollinrake said: “Reports suggest that Mandelson and his partner received thousands of pounds in payments from the notorious paedophile Jeffrey Epstein at the same time as Mandelson was passing on highly sensitive government information.
“This whole thing stinks.
“That is why HMRC must urgently investigate this potential cash for leaks scandal.
“The British public deserve the full truth about the man Keir Starmer appointed to one of the most sensitive and important diplomatic posts.”
A spokesman for HMRC told the newspaper: “We cannot comment on individuals due to taxpayer confidentiality law.”
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