Damian Green, the first secretary of state and effectively Prime Minister Theresa May's deputy, said the story, which was first reported in The Sunday Times, was 'completely untrue and comes from a tainted and untrustworthy source.'
According to The Sunday Times, former Metropolitan Police Assistant Commissioner Bob Quick alleged that the material was discovered on one of Green's parliamentary computers by police officers conducting an inquiry into government leaks in 2008.
'The allegations about the material and computer, now nine years old, are false, disreputable political smears from a discredited police officer acting in flagrant breach of his duty to keep the details of police investigations confidential, and amount to little more than an unscrupulous character assassination,' Green said in a statement published on Twitter.
The allegations against Green come on the same day that journalist and CNN contributor Jane Merrick revealed that former Defence Secretary Michael Fallon lunged at her and attempted to kiss her on the lips after a lunch meeting in 2003.
Fallon resigned from his post last Wednesday, the day after admitting he had touched the knee of journalist Julia Hartley-Brewer at a conference dinner 15 years ago.
Merrick, who was 29 at the time, wrote in the Observer that she felt 'humiliated, ashamed.'
She added: 'Was I even guilty that maybe I had led him on in some way by drinking with him? After years of having a drink with so many other MPs who have not acted inappropriately towards me, I now know I was not.'
Merrick said she phoned Downing Street at 5 p.m. on Wednesday to report the incident to one of the Prime Minister's aides -- by 7.30 p.m. Fallon had resigned.
The latest revelations will come as a hammer blow to Prime Minister May, who will meet with fellow party leaders later this week to discuss plans for tackling sexual harassment and abuse in Parliament.
Speaking on 'The Andrew Marr Show' on Sunday, Home Secretary Amber Rudd said there will be a 'clear-out' in Westminster after the avalanche of claims.
'I know that the Cabinet Office is going to be looking at this tomorrow along with the wider inquiry about Damian, and I do think that we shouldn't rush to allege anything until that inquiry has taken place,' she added.
Saturday's allegations against Green come days after he was accused by journalist Kate Maltby of making unwanted advances toward her during a meeting in 2015.
Writing in The Times of London newspaper on Wednesday, Maltby said: 'He offered me career advice and in the same breath made it clear he was sexually interested. It was not acceptable to me at the time and it should not be acceptable behavior in Westminster in the future.'
She said Green, who was a friend of the family nearly 30 years her senior, had 'steered the conversation to the habitual nature of sexual affairs in Parliament,' before mentioning that 'his own wife was very understanding.'
She added: 'I felt a fleeting hand against my knee -- so brief, it was almost deniable. I moved my legs away, and tried to end the drink on friendly terms.'
Green described those allegations as 'completely untrue' and 'deeply hurtful' in a statement Wednesday.
He added: 'This untrue allegation has come as a complete shock and is deeply hurtful, especially from someone I considered a personal friend.'
Maltby, who also contributes to CNN, said she had dropped all contact with Green after the encounter. But in May last year, she said, he contacted her by text message after seeing a piece she had written for The Times on the history of corsets that included an image of her wearing one.
According to Maltby, Green's text message read: 'Long time no see. But having admired you in a corset in my favorite tabloid I feel impelled to ask if you are free for a drink anytime?'
Maltby said she had ignored the message but had since had contact with Green on a professional basis.
'Awkward relationships like this are part of being a young woman in Westminster,' she wrote. 'It shouldn't be the norm -- which is why I have chosen to speak out. But it's crucial to understand that most of us have to maintain relationships with such men in order to thrive professionally.'
Fellow Conservative lawmaker Anna Soubry has called for Green to be suspended while the investigation takes place.
May has launched an investigation into the allegations made by Maltby, while a number of other Conservative lawmakers have also found themselves facing investigation.
Labour Party allegations
The allegations of sexual abuse and harassment are not confined to one party, with the Labour Party also being criticized for its handling of the issue.
Last week, Labour activist Ava Etemadzadeh said the party took three years to act after she informed them that MP Kelvin Hopkins, 76, made inappropriate physical contact with her and sent her unprofessional text messages.
In a statement issued by his solicitors and reported by the UK Press Association, Hopkins said: 'I absolutely categorically deny that I in any way engaged in such inappropriate conduct.'
A recent investigation has also been launched into the case of Bex Bailey, a former Labour activist, who revealed she was raped at a party event at age 19, and was discouraged from reporting the attack by a senior official. Bailey did not name her attacker.
There is also a complaint against lawmaker Clive Lewis who is accused of groping a woman at the party's annual conference. Lewis strenuously denies the allegation.
The claims come in the wake of the scandal involving accusations of sexual assault and harassment against Hollywood producer Harvey Weinstein, and the #MeToo campaign, in which victims of sexual abuse have been sharing their experiences.