The government sacked Lord Mandelson as its ambassador to the US after emails showed he had been in contact with Epstein after his first conviction, offering him support.
In the messages, which were published by Bloomberg and the Sun, Lord Mandelson was reported to have told Epstein to “fight for early release” and, the day before he began his prison sentence: “I think the world of you.”
No 10 sources said he had been “economical with the truth” before he was appointed and they were not aware of the “depth” of their relationship.
On Sunday, Lord Mandelson said the government “knew everything” when giving him the job, “but not the emails because they came as a surprise to me”.
“I didn’t remember sending them… they no longer existed on my server,” he said.
He said he understood why he had been sacked.
“The prime minister found himself in the middle of what must’ve seemed to him to have been some kind of thermonuclear explosion – I’ve been there, I know what goes on.
“I wish I’d had the opportunity to remind him of the circumstances of my relationship, my friendship with Jeffrey Epstein and how I came to write the emails in the first place.
“I didn’t, so I understand why he took the decision he did, but one thing I’m very clear about is that I’m not going to seek to reopen or relitigate this issue. I’m moving on.”
Labour’s Transport Secretary Heidi Alexander, who was interviewed on the same programme, said Lord Mandelson had shown “at best, deep naivety” in his remarks.
“It would have gone a long way for the women who were subjected to the most appalling treatment at the hands of Jeffrey Epstein for Peter to have apologised and taken that opportunity,” she said.
There would “clearly be a discussion about due diligence before you appoint someone to such a role”, she said, but she understood the “detailed information” about their relationship was not available when he was given the job.
She said of his continued relationship with Epstein: “If somebody that I was associated with was in that situation, I wouldn’t touch them with a barge pole.”
Downing Street said the emails showed the “depth and extent” of the relationship was “materially different” to what they had known when appointing Lord Mandelson, particularly his “suggestion that Jeffrey Epstein’s first conviction was wrongful and should be challenged was new information”.
“In light of that, and mindful of the victims of Epstein’s crimes, he was withdrawn as ambassador with immediate effect,” it said.
A key architect of New Labour, Lord Mandelson has been in and out of British politics for four decades.
He held a number of ministerial roles from the election of Tony Blair – and had to resign from post twice – until Labour lost power in 2010.