Ed Miliband has admitted he was "worried" about Keir Starmer's decision to appoint Mandelson as US ambassador.
The Energy Secretary told how he "steered well clear of Peter Mandelson when I became Labour leader" in a frank interview with Sky News on Tuesday.
Mr Miliband added that he thought "it could blow up, it could go wrong" when Mandelson was appointed to the UK's top diplomatic role.
He said Lord Mandelson should never have been appointed because of what was already known about his links with Jeffrey Epstein, his lobbying work and his record of being sacked twice from Government.
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When that record was put to Mr Miliband, he told Sky News: “You’re saying he should never have been appointed and I agree with you.”
Asked if Sir Keir Starmer should lose his job, he said: “I don’t think so, no. Obviously, I don’t.
“I think Prime Ministers make errors. Prime Ministers are fallible. Prime Ministers are human. ”
But Mr Miliband pointed out that “I steered well clear of Peter Mandelson when I became Labour leader in 2010”.
Asked what he thought when Lord Mandelson’s appointment was announced, he said: “That it could blow up, that it could go wrong.”