Sir Keir Starmer has confirmed conversations took place about a potential diplomatic role for his senior aide Matthew Doyle.
The ex-communications chief was made a Labour peer after leaving Downing Street in March 2025, but was suspended from the parliamentary party this February over links with a convicted sex offender.
The allegation was raised by Sir Olly Robbins as he gave evidence to the Foreign Affairs Committee on Tuesday, after he was sacked by Sir Keir last week in the ongoing row about Lord Mandelson's appointment as US ambassador.
On Tuesday, Lord Doyle said he had never sought such a position, and was not aware of anyone speaking to the Foreign Office about finding a role for him.
At PMQs, the prime minister was questioned by Lib Dem leader Sir Ed Davey, and Conservative MP Mike Wood, whether Downing Street had considered appointing Doyle to a diplomatic position.
Sir Keir told Wood: "Matthew Doyle worked for many years in public service, for me as prime minister and other ministers.
"When people leave roles in any organisation there are often conversations about other roles they want to apply for, but nothing came of this."
Lord Doyle has previously apologised for his past association with Sean Morton, a former Labour councillor in Moray who admitted indecent child image offences in 2017.
It came after the Sunday Times reported that Lord Doyle campaigned for Morton after he was charged with possessing and distributing indecent images of children in December 2016.
Lord Doyle has said his support for Morton's election campaign came at a time when he was maintaining his innocence.
The row over the sacking of Sir Olly, who was the senior civil servant at the Foreign Office, has dominated the past week.
It emerged his department had given Lord Mandelson security clearance for the top diplomatic job in January 2025, despite concerns being raised during the vetting process.
Lord Mandelson formally took up the role the following month, but was sacked seven months later over his ties to the late convicted sex offender Jeffrey Epstein.
At PMQs, Conservative leader Kemi Badenoch embarked on a series of questions to the prime minister over the evidence provided by Sir Olly.
She asked whether the PM stood by his statement that due process was followed in Lord Mandelson's appointment, to which he replied: "Yes, I do".
She said trying to get a job for Lord Doyle in the Foreign Office was "ridiculous", adding: "He promised them [Labour MPs] probity; what he has given them is cronyism and an Old Boy's Club where Matthew Doyle is being proposed as an ambassador."
The Tory leader demanded Sir Keir's resignation, saying Sir Olly had been sacked for the failures of the prime minister, adding he "did not follow due process - yet he told the House he had".
Labour MPs joined Sir Keir in chants of "wrong, wrong, wrong" as he sought to dismiss Badenoch's attacks, but a number of the MPs on the green benches behind the prime minister did not join in with supportive cheers at what is normally an opportunity to back their leader.
Sir Keir said: "The leader of the opposition claimed on Friday that Mandelson could not have been cleared against security advice. She was wrong about that.
"She said that ministers must have been told. She was wrong about that.
"She claimed that there was deliberate dishonesty, she was wrong about that. Wrong, wrong, wrong."
He added: "She rushed to judgement as she always did, just like [she did with] the Iran war."
The foreign affairs select committee has confirmed Morgan McSweeney, former Downing Street chief of staff, who resigned over his role in Lord Mandelson's appointment in February, will give evidence on Tuesday next week.
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