Prime minister Theresa May's deputy, Damian Green, is to be investigated following an allegation of inappropriate behaviour.
Activist Kate Maltby wrote in The Times that he "fleetingly" touched her knee in a pub in 2015, and this year sent her a "suggestive" text message after she posed in a corset for the paper.
The Cabinet Secretary is to consider whether he broke the ministerial code.
Mr Green has described the claims as "absolutely and completely untrue".
Ms Maltby, a writer and academic some 30 years younger than Mr Green, said the encounters left her feeling "awkward, embarrassed and professionally compromised".
Mr Green, the first secretary of state, and Theresa May's effective deputy, said he had known Ms Maltby since 2014 and the pair "had a drink as friends twice-yearly". He denied putting his hand on her knee.
"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," he said.
"This untrue allegation has come as a complete shock and is deeply hurtful, especially from someone I considered a personal friend."
It comes as allegations and rumours relating to sexual harassment and abuse by MPs swirl around Westminster.
This week the spokesman of Defence Secretary Sir Michael Fallon confirmed he was once rebuked by a journalist for putting his hand on her knee during dinner.
On Tuesday, Labour confirmed it had launched an independent inquiry into claims that activist Bex Bailey, 25, was discouraged by a party official from reporting an alleged rape at a Labour event in 2011.
She told the BBC she had waived her anonymity to urge changes to the way such cases are handled.
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.
The government has promised urgent action to improve the handling of complaints about the way MPs' staff are treated.
Meanwhile, the BBC has seen a list, thought to have been compiled by staff and researchers at Westminster, detailing a range of mostly unproven allegations about 40 Conservative MPs and ministers.
Among the claims are a number of serious allegations of inappropriate behaviour with junior members of staff, the use of prostitutes and affairs between MPs.
BBC political editor Laura Kuenssberg described the list as "both a mixture of unsavoury allegations, reports of well-known relationships, and some claims that are furiously denied".
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