The Telegraph understands the decision was made by mutual consent and that McSweeney and Starmer felt that it was the right time for him to move on.
Downing Street sources insisted the priorities of the Government had not changed. Starmer is expected to address the nation as soon as Monday to explain how he will respond to issues raised by the Mandelson scandal.
In a response that failed to mention the Mandelson scandal, Starmer credited McSweeney’s “dedication, loyalty and leadership” for Labour’s 2024 general election win, and expressed a “debt of gratitude”.
Mandelson was appointed despite Downing Street knowing about his ongoing friendship with the paedophile even after Epstein was convicted of child sex crimes.
Fresh revelations about the connections between the two men have plunged Starmer into the worst crisis of his premiership.
Before the resignation, Pat McFadden, the Work and Pensions Secretary, voiced his support for McSweeney, saying he would not need to go “if the Prime Minister stays”.
McSweeney’s resignation has prompted calls from mutinous Labour MPs for Starmer to follow, after more than a year and a half of his political authority draining away.
This will lead to questions about Starmer’s future and whether his premiership can survive the coming week.
In a statement to journalists on Sunday afternoon, McSweeney said he took “full responsibility” for advising the Prime Minister to choose Mandelson for the role.
He added: “In the circumstances, the only honourable course is to step aside. This has not been an easy decision.”
McSweeney had been at Starmer’s side since he became Labour leader in 2020.
He became the Prime Minister’s chief of staff in October 2024 after a turbulent start to Labour’s time in office led to the sacking of Baroness Susan Gray of Tottenham from Starmer’s top team.
However, McSweeney appeared to show little of the political nous in office that secured the election of Westminster’s first Labour Government since 2010, and was blamed by restive backbenchers for a series of highly unpopular policies and about-turns.
Distrust among MPs then turned to anger over McSweeney’s attempts to launch rearguard action against the sacking of Mandelson in September.
McSweeney continued: “Much has been written and said about me over the years but my motivations have always been simple: I have worked every day to elect and support a government that puts the lives of ordinary people first and leads us to a better future for our great country.”
The 48-year-old Irishman added that he wanted to share “two further reflections” on his resignation.
“Firstly, and most importantly, we must remember the women and girls whose lives were ruined by Jeffrey Epstein and whose voices went unheard for far too long,” he wrote.
“Secondly, while I did not oversee the due diligence and vetting process, I believe that process must now be fundamentally overhauled. This cannot simply be a gesture but a safeguard for the future.”
On Sunday afternoon, Labour MPs insisted that Starmer quit despite McSweeney’s departure appearing to offer the Prime Minister a final throw of the dice.
Brian Leishman, the Labour MP for Alloa and Grangemouth, said: “There must be a change in political direction and that comes from the very top”.
“So the Prime Minister must look at his own position and question whether he should follow McSweeney’s lead one last time, and resign for the good of the country and the Labour Party.”
Jon Trickett, the Labour MP for Normanton and Hemsworth, added: “I believe Morgan McSweeney would inevitably have to resign”.
“But the buck stops at the top, and the PM needs to reflect carefully on his judgment about appointing both Mandelson and McSweeney.”
A third Labour MP, speaking anonymously, said Starmer was now like a “wounded animal” and would struggle on until the local elections.
They said: “By then, Starmer can resign on the grounds of those losses and not the reputational disaster of Epstein and Mandelson.
“It won’t matter though. He’ll go down as the worst PM in Labour history and one that may have finally broken it.”
Kemi Badenoch, the Tory leader, accused Starmer of passing the buck, while the leaders of the Liberal Democrats and Greens also suggested the Prime Minister must now go.
Badenoch said: “It’s about time. But once again with this PM it’s somebody else’s fault. ‘Mandelson lied to me’ or ‘Morgan advised me’.
“Keir Starmer has to take responsibility for his own terrible decisions. But he never does.”
Nigel Farage, the Reform UK leader, accused Starmer of continuing the “chaos” that engulfed the Tories during their own final years in government.
He said: “My money says Starmer won’t be far behind after Labour’s disaster in the elections this coming May.”
On Sunday evening, an email circulated among Downing Street staff named Jill Cuthbertson and Vidhya Alakeson, McSweeney’s deputies, as Starmer’s acting joint chiefs of staff.
Both have long been members of Starmer’s inner circle during his time as leader of the opposition and then in Government.
Cuthbertson was in charge of Starmer’s private office until his general election victory in 2024. Alakeson, meanwhile, was Labour’s director of external relations.
The appointment of two women follows criticism of Starmer for running a “boys’ club”, with most senior posts held by men.
Additional reporting by Simon Johnson and Samuel Montgomery
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