The Ministry of Housing is investigating allegations that a member of staff met men though a "sugar daddy" website and discussed her work with an undercover reporter.
According to the Daily Mirror the woman boasted of knowing "everything" about Housing Minister Dominic Raab and that she knew his "every move".
The employee met twice with an undercover journalist posing as a wealthy businessman, including at a five-star hotel less than a mile from the House of Commons.
There is no suggestion that Dominic Raab was aware of the woman's actions.
At the end of each meeting she was paid £750, the paper said.
The Ministry for Housing, Communities and Local Government (MHCLG) launched the probe amid concerns that the woman's actions could pose a security risk.
There is no suggestion that Mr Raab was aware of the woman's actions.
A spokeswoman for the MHCLG told the Press Association: "We are aware of this allegation against one of our members of staff, and are investigating.
"There is no suggestion that any Official information has been disclosed."
The member of staff allegedly met with men on a controversial site used by younger women known as "sugar babies" and older, wealthy men to arrange liaisons.
According to the paper when asked what her bosses would think of her use of the site she said "I don't care".