I've sown tomato seeds in those little Jiffy Pellets but now there are loads
of jelly-type mushrooms growing out of the pellets. The tomato plants
themselves are growing well.

I'm now at the potting on stage where I'm going to pop the pellets into
larger pots of compost but I'm worried that the mushrooms will simply
continue to grow. Should I simply ignore them or what?

Many thanks.