Sir Keir Starmer has heavily criticised Peter Mandelson in PMQs.
Responding to a question from the leader of the opposition, Kemi Badenoch, the prime minister says: "To learn that there was a cabinet minister leaking sensitive information at the height of the response to the 2008 crash is beyond infuriating.
"And I am as angry as the public and any member of this House. Mandelson betrayed our country, our Parliament and my party."
He adds: "Mr Speaker, he [Mandelson] lied repeatedly to my team when asked about his relationship with Epstein before and during his tenure as ambassador.
"I regret appointing him. If I knew then what I know now, he would never have been anywhere near government."
Starmer goes on to confirm that he has instructed his team to draft legislation to remove Mandelson's peerage, as well as wider legislation to remove disgraced peers in future.
He adds that he has asked the King to remove Mandelson from the Privy Council.
Starmer appointed Mandelson as the UK's ambassador to the US in February last year.
However, he sacked him in September after new emails revealed Mandelson sent messages of support to Epstein even as the paedophile financier faced jail for sex offences in 2008.
Mandelson resigned from the Labour Party earlier this week after more emails between him and Epstein were revealed as part of a tranche of new Epstein documents released by the US Justice Department.
It was also announced yesterday that he would resign his membership of the Lords.
The Metropolitan Police said last night that they would launch an investigation into allegations of misconduct in public office over claims Mandelson shared market sensitive information with Epstein in the aftermath of the 2008 financial crash.
Scroll down to read more about this story, including:
- A debate by MPs on releasing documents relating to Mandelson's appointment as UK ambassador to the UK;
- Analysis from Beth Rigby and Sam Coates on the Mandelson scandal;
- And more from Prime Minister's Questions - including Kemi Badenoch's criticism of Starmer.