Peter Mandelson released from bail conditions

Police have decided former minister is not a flight risk, but he remains under investigation

Police have released Peter Mandelson from his bail conditions after deciding he was not a flight risk, the Guardian has learned.

Sources say the Metropolitan police have decided to drop the conditions they applied after arresting the former cabinet minister on suspicion of misconduct in public office last month, though he remains under investigation.

Mandelson was arrested at his London home in late February as part of an investigation into whether he leaked Downing Street emails and market-sensitive information to Jeffrey Epstein, the financier and child sex offender. Mandelson has denied any wrongdoing.

He was arrested after a tipoff from the Commons speaker, Lindsay Hoyle, that he was planning to flee to the British Virgin Islands.

The Met is understood to believe it made the right decision to arrest the peer, but has apologised to Hoyle for accidentally revealing his identity.

A Met spokesperson said: “A 72-year-old man arrested on suspicion of misconduct in public office has been released under investigation. The investigation remains ongoing.”

A spokesperson for Mishcon de Reya, the law firm that represents Mandelson, said: “In light of speculation following his arrest last week, we wish to clarify that the Metropolitan police have removed all of Peter Mandelson’s bail conditions and returned his passport.

“Our client did not and does not pose a flight risk and will continue to cooperate with the police investigation. He will not be making any further comment at this stage.”

Mandelson’s arrest came weeks after the release of documents by the US Department of Justice that showed him to have been in regular contact with Epstein over a number of years.

The documents included emails that appeared to show Mandelson passing on confidential information when he was the business secretary, including a 2009 memo by an adviser to Gordon Brown. The memo advised the then prime minister on the potential sale of government-held assets.

Mandelson stood down from the House of Lords in the wake of that release and quit the party he has worked for since he was a young man, while the documents also triggered a police investigation.

The documents also had significant consequences for the government, prompting the resignation of the prime minister’s chief of staff, Morgan McSweeney, who had successfully lobbied for Mandelson to be made Washington ambassador.

Ministers are braced for the release next week of the first set of documents relating to that appointment, with the documents expected to include information on the vetting that took place beforehand.

The Met had planned to interview Mandelson under caution, but ended up arresting him at his London home on a Monday afternoon and questioning him for several hours.

After he returned home, Mandelson sent a message to friends saying he had been arrested “because [officers] claimed the lord speaker received information that I was about to flee to the British Virgin Islands and take up permanent residence abroad”.

He added: “I need hardly say, complete fiction.”

Hoyle revealed later he had been the source of the information, which he told MPs he had passed on “in good faith”.