The data watchdog is to apply for a warrant to search computers and servers used by Cambridge Analytica (CA) amid concerns at Westminster about the firm's activities.
Prime Minister Theresa May's official spokesman called on Facebook and CA to co-operate fully with the investigation by Information Commissioner Elizabeth Denham amid concerns about the use of data from users of the social media giant.
Ms Denham criticised CA for being "unco-operative" with her probe as she confirmed the Information Commissioner's Office (ICO) would apply for a warrant to help her examine the firm's activities.
Meanwhile, further claims about CA included allegations the company offered to entrap politicians and used ex-spies to dig for dirt on potential targets.
An undercover investigation by Channel 4 recorded CA's chief executive Alexander Nix suggesting ways he could help a potential client.
A reporter posing as a fixer for a wealthy client hoping to get candidates elected in Sri Lanka met with Mr Nix and other senior figures from CA.
Asked about what "deep digging" could be done, Mr Nix told the reporter: "Oh, we do a lot more than that.
"I mean deep digging is interesting but you know equally effective can be just to go and speak to the incumbents and to offer them a deal that's too good to be true, and make sure that that's video recorded, you know, these sorts of tactics are very effective instantly having video evidence of corruption, putting it on the internet, these sorts of things."
Mr Nix said they could "send some girls around to the candidate's house", adding that Ukrainian girls "are very beautiful, I find that works very well", Channel 4 reported.
CA, which provided services to Donald Trump's election campaign, claimed the report was "edited and scripted to grossly misrepresent" the way the company conducts its business.
The firm said it routinely undertook conversations with prospective clients to "tease out any unethical or illegal intentions" and the executives "humoured" the reporter's questions.
But Mr Nix said: "In playing along with this line of conversation, and partly to spare our 'client' from embarrassment, we entertained a series of ludicrous hypothetical scenarios.
"I am aware how this looks, but it is simply not the case. I must emphatically state that Cambridge Analytica does not condone or engage in entrapment, bribes or so-called 'honeytraps', and nor does it use untrue material for any purpose.
"I deeply regret my role in the meeting and I have already apologised to staff.
"I should have recognised where the prospective client was taking our conversations and ended the relationship sooner."
CA was suspended from Facebook last week after it emerged that data on millions of users had not been destroyed as agreed.
Whistleblower Chris Wylie, a former research director at the UK-based company, told Channel 4 News a so-called data grab had been carried out on more than 50 million profiles in 2014.
Damian Collins, chairman of the House of Commons Digital, Culture, Media and Sport Committee, has called on Facebook founder Mark Zuckerberg to appear before MPs to explain his company's actions.
Asked about the reports, Mrs May's spokesman said: "The allegations are clearly very concerning.
"It is essential that people can have confidence that their personal data will be protected and used in an appropriate way.
"It is absolutely right that the Information Commissioner is investigating this matter.
"We expect Facebook, Cambridge Analytica and all the organisations involved to co-operate fully."
The ICO is investigating the use of personal data for political campaign, including the activities of CA.
Ms Denham said: "This is a complex and far-reaching investigation for my office and any criminal or civil enforcement actions arising from it will be pursued vigorously."