Mr Bailey – who was running to replace Sadiq Khan in the 2021 contest – had previously been pictured at the event but was not seen in the most recent footage.
Speaking to reporters in Westminster on Monday, Mr Bailey said he had never seen the video and that the event “obviously turned into something once I left and I didn’t realise that”.
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Asked if he thought the footage was acceptable, he replied: “It isn’t – I’m not saying it is for a second.”
And pressed on whether the British public deserved an apology, he said: “Unreservedly – I apologised then and I apologise now.
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“It was a staff team that were given to me, but the buck stops with me.”
The footage, obtained by The Mirror, showed Mr Bailey’s staff partying while Tier 2 restrictions were in place.
The Mirror previously released a photo from the party, which was subsequently investigated by police. No further action was taken at the time due to lack of evidence.
However, the police have said they are “considering” the newly-revealed video.
COVID rules at the time said there should be no mixing of households indoors, apart from support bubbles, while only six people were allowed to meet – socially distanced – outside.
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Leaked footage of rule-breaking bash
In total, 24 people were at the party at Tory campaign HQ – more than the number allowed at a wake.
In the video, one man is heard asking: “Are you filming this?”, while another responds: “It’s for party, erm, party use.”
Meanwhile, Mr Mallet, who helped run Zac Goldsmith’s campaign to be London mayor in 2016, is seen in the video laughing with colleagues, and a voice is then heard saying: “What do you think of this?”
Asked whether Mr Bailey should give up his peerage in light of the video of his staff, he replied: “That will be for others to decide – for me, it has been a great privilege and I would like to keep doing work for the rest of the country and London as well.”
On Sophy Ridge on Sunday, Mr Gove was repeatedly pressed on whether it was appropriate for Mr Bailey and Mr Mallet to have been given honours.
The cabinet minister said the current rules – that a resigning prime minister can honour who they want – should not be interfered with.
He added that a debate on changing the rules was “well worth having”, but that “procedure” should be followed for the moment and those who broke restrictions should still be given gongs.