Sir Olly later told a committee of MPs he had followed the proper process while under “constant pressure” from No 10 to approve Lord Mandelson’s appointment.
In a letter sent to government employees across Whitehall on Wednesday afternoon, Sir Keir told them he recognised “the events of the last recent weeks have felt unsettling”.
He said: “But wherever you serve, I want to be clear: these events do not define the civil service.”
He added: “To those who feel exposed by recent scrutiny, let me say this: I value the ‘speaking truth to power’ that is the hallmark of our system.
“I want a culture where information flows freely, where risks are flagged early, and where we work together to solve problems before they become crises.”
The prime minister said “the relationship between a minister and their officials relies on a bedrock of total transparency”.
Sir Keir said without trust, “the partnership that sits at the heart of our constitution cannot function”.
The government is investigating whether Sir Olly was given the correct information before he approved security clearance for Lord Mandelson, who was sacked as the UK’s ambassador in Washington last year.
Sir Adrian Fulford, a retired judge, is conducting a review into the process.
In his letter, Sir Keir told officials: “We are fixing the processes that have failed, but we are not changing the fundamental value we place on your role.”