Peter Mandleson is set to be the next Ambassador to the US (Image: Getty)
Sir Keir Starmer has picked Peter Mandelson as the next ambassador to the US.
The Prime Minister selected Labour grandee Lord Mandelson, making him the first political appointment to the role in decades.
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The former Cabinet minister will take over as Donald Trump begins his second term as US president, replacing Dame Karen Pierce, whose term in Washington DC is due to end in early 2025.
A government source said: "The fact the prime minister has chosen to make a political appointment and sent Lord Mandelson to Washington shows just how importantly we see our relationship with the Trump administration.
"We're sending someone close to the prime minister with unrivalled political and policy experience, particularly on the crucial issue of trade. He's the ideal candidate to represent the UK's economic and security interests in the USA."
Former Business Secretary and de-facto deputy prime minister to Gordon Brown Lord Mandelson is a close ally of Morgan McSweeney, Sir Keir’s chief of staff.
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Foreign Secretary David Lammy is also said to have backed the appointment.
Mandelson is said to have beaten former foreign secretary David Miliband, Baroness Amos, a former development secretary, and Baroness Ashton of Upholland, to the post.
Sir Keir is said to believe that Lord Mandelson has significant expertise in trade deals and can help bolster ties between London and Washington.
In November, the former MP for Hartlepool told the BBC that he would be "very interested" in giving advice on trade to whoever got the job.
Speaking on the BBC's Sunday With Laura Kuenssberg programme, Lord Mandelson said he was "more in favour of a new relationship rather than a special one" with the US, and added: "Can I just make the point if you don't mind: nobody has spoken to me about this job.
"I read about it in the papers but nobody has actually spoken to me about it, so let's put it to one side."
Mr McSweeney flew to Florida and Washington for meetings with key members of Trump’s team at the start of December.
Many saw it as an attempt to bolster relations and weaken Nigel Farage's position.
Elon Musk met the Reform UK leader this week in Florida estate, with the Brexit champion revealing the multibillionaire was giving “serious thought” to bankrolling the party.
Pushed further on whether he would be interested in the Washington role, the former government minister said: "I would be very interested indeed in giving advice about trade to whoever is appointed."
Mr Trump has threatened tariffs on British imports of between 10 and 20 per cent, which would represent a multi-billion pound hit to the UK economy.
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And Mr Musk, one of his closest allies, also accused Sir Keir of running a “police state” and supported calls for another general election.
A senior Downing Street source told the Telegraph “the mood music was very warm” and Trump “is nothing but warm about the UK”.
They added: “As the year closes, team Starmer is confident the UK is in a good position for a strong bilateral relationship with the new presidency.”