Theresa May has asked Whitehall's top mandarin to investigate allegations that her effective deputy, Damian Green, made inappropriate advances towards a female activist.
Kate Maltby, who is three decades younger than the First Secretary of State, told The Times that Mr Green had "fleetingly" touched her knee during a meeting in a Waterloo pub in 2015 and two years later sent her a "suggestive" text message after she posed in a corset for the newspaper.
Mr Green said any allegation that he made sexual advances to Ms Maltby was "untrue (and) deeply hurtful".
It comes as allegations and rumours relating to sexual harassment and abuse by MPs swirl around Westminster.
Labour has launched an independent inquiry into claims that prominent activist Bex Bailey was discouraged by a party official from reporting an alleged rape at a Labour event in 2011.
And in a separate case, an anonymous woman who claims she was sexually assaulted by an MP on a foreign work trip last year has said her allegations were not taken seriously.
Ms Maltby, 31, told The Times that 61-year-old Mr Green was a longstanding friend of her parents who she had approached for advice after becoming involved in Tory activism during her twenties.
She said that when they met for drinks in 2015, he suggested that he would be able to help her if she was considering a political career, before turning the conversation to the subject of affairs at Westminster.
Ms Maltby said that he mentioned that his own wife was "very understanding" and she then "felt a fleeting hand against my knee - so brief it was almost deniable".
Feeling "angry" about the incident, she says she avoided Mr Green until his text about her newspaper photograph, in which he said he had "admired you in a corset" and invited her for a drink.
She says she ignored the message, but contacted Mr Green six weeks later to congratulate him on his appointment to Mrs May's Cabinet and has maintained contact since.
Writing in The Times, she said that she doubted Mr Green knew how "awkward, embarrassed and professionally compromised" she felt about the alleged incident.
Mr Green said: "It is absolutely and completely untrue that I've ever made any sexual advances on Ms Maltby. I have known Ms Maltby since she contacted me as board member of Bright Blue, the Conservative think tank, in 2014, and we have had a drink as friends twice-yearly.
"The text I sent after she appeared in a newspaper article was sent in that spirit - as two friends agreeing to meet for a regular catch up - and nothing more. This untrue allegation has come as a complete shock and is deeply hurtful, especially from someone I considered a personal friend."
A Downing Street spokesman said: "An allegation has been made in relation to the First Secretary of State, which he strongly denies. The Prime Minister has referred the matter to the Cabinet Secretary to establish the facts and report back as soon as possible."
Meanwhile, Labour leader Jeremy Corbyn vowed there would be "no tolerance in the Labour Party for sexism, harassment or abuse" after Ms Bailey spoke out about the party's failure to support her following her rape.
Ms Bailey, 25, a former member of the party's National Executive Committee, has called for an independent agency to be set up to deal with such issues.
She told BBC Radio Four's PM programme that her attacker was not an MP, but someone more senior than her in the party.
Aged 19 at the time of the attack, she said she felt too scared and ashamed to report it to the police.
"It took me a while to summon up the courage to tell anyone in the party," she said. "But, when I did, I told a senior member of staff, who told me, it was suggested to me that I not report it.
"I was told that if I did it might damage me ... I wasn't given good advice. I wasn't given a procedure when I asked for it so that I could see what would happen if I did report it and then make a decision.
"It seemed to be that there wasn't one that existed and I wasn't signposted to anyone else that could help me in terms of a charity or anything like that. I don't think I was even given a cup of tea at the time."
Labour said it takes the allegations "extremely seriously" and has launched an independent inquiry into the claims.
A spokesman said: "It takes great courage for victims of rape to come forward - and all support must and will be made available to them. We would strongly recommend that the police investigate the allegations of criminal actions that Bex Bailey has made. Labour will also launch an independent investigation into claims that a party employee acted improperly over these 2011 allegations."
Mr Corbyn praised Ms Bailey for having the "enormous courage" to describe her ordeal and promised her "my full support and solidarity".
He added: "I have asked Labour's general secretary, Iain McNicol, to launch an independent investigation into the allegations that she wasn't given the support from the party she should have received and had the right to expect. There will be no tolerance in the Labour Party for sexism, harassment or abuse. Whatever it takes, we are absolutely committed to rooting it out."
ITV News reported on an alleged attack by an unnamed MP on a foreign work trip in 2016.
The women, whose identity was hidden, told the programme: "He was quite insistent on me sitting on the bed, at which point I really didn't feel comfortable, to the point where he pushed me on the bed and held me by the shoulders and tried to kiss me.
"I made it very clear that was not what I wanted, but he was insistent, and pushed me back onto the bed and kind of held me there. I mean the shock soon turned into fear, I realised I was in quite a vulnerable situation, being in a foreign country, nobody knew where I was, and with someone a lot bigger and stronger than me."
The woman says she managed to get away from the MP and reported the incident the following day.
ITV News said it was understood that police interviewed the MP, but couldn't charge him as the alleged assault happened abroad.
The woman says she also went to the Parliamentary Commission for Standards, and ITV News reported the body told them they do not comment on individual cases.
The MP's party was also informed about the allegations, the woman said.
The woman said: "I don't think it was taken seriously whatsoever. Initially, I couldn't believe it. I was horrified. I mean I've never worked in an institution which made me just feel so isolated."
Lawyers for the MP concerned told the broadcaster he categorically denied the claims.