Education Secretary Ruth Kelly cleared a man to teach despite his conviction for indecently assaulting a 15-year-old girl, according to reports.
Education Secretary Ruth Kelly has faced increasing criticism
The Sunday Telegraph said her office sent a letter to William Gibson, 59, giving him permission to teach, but warning him about his future conduct.
Gibson, convicted in 1980, worked as a teacher in Bournemouth despite being previously removed from three schools.
A review is under way after revelations of other similar cases.
In the letter, dated 31 January 2005, Ms Kelly's department told Gibson she had decided "not to bar or restrict your employment".
Signed by an official, it says: "The Secretary of State has given weight to the fact that you accept that your actions were unwise and your behaviour was unacceptable; you understand the related consequences of your actions; and, you have undertaken teaching work in recent years to good effect."
Gibson had been working as a supply teacher at Portchester School in Bournemouth since September but has now been suspended pending an investigation.
It previously emerged that, since his conviction, Gibson worked at two schools in South Tyneside and one in neighbouring County Durham from 2003 to 2005.
William Gibson was employed in Bournemouth
Conservative leader David Cameron called for an independent person to be appointed to investigate how sex offenders were able to get employment in schools.
Speaking to the BBC's Sunday AM, he said the situation was "a shambles" but now wasn't the time to call for Education Secretary Ruth Kelly to resign.
"I think we've got to actually get to the bottom of what's happened before we start making calls for people to resign," he said.
He added that the news that someone who was on List 99, which should have banned him from working with children, was working in schools was "deeply disturbing".
Liberal Democrat education spokesman Ed Davey said there was "something seriously wrong" that checks had been carried out yet Gibson was still employed in Bournemouth.
The publication of the letter will add to growing criticism of Ms Kelly's department.
A week ago it emerged that PE teacher Paul Reeve had been cleared to work at a Norwich school even though he had been cautioned for accessing child pornography.
The Observer reported that the chief constable of Norfolk Police had written to the Home Office expressing concern that Mr Reeve had been placed on the sex offenders' register but not List 99.
It also emerged on Saturday that science teacher Keith Hudson, 52, from Sussex, who was on List 99, was given permission by former Education Secretary Estelle Morris to work in all-girl schools despite a conviction for possessing indecent images of boys.
The Care Standards Tribunal backed Ms Morris's decision after hearing medical evidence that while Hudson's feelings towards young boys were "homosexual, paedophilic and inappropriate", he had "no interest in girls".
Review due shortly
Responding to the newspaper reports, a spokesman for the Department for Education said a review on the decision process was already under way.
"We have been clear throughout that there is a responsibility on all employers, schools and supply agencies to carry out the necessary checks on permanent and supply teachers."
The department spokesman said List 99 was used with criminal checks to reveal if someone has a conviction.
"The decision on whether to employ someone is then the employer's, taking account of all the facts.
"Clearly, we are also looking at the criteria under which ministers are asked to make these decisions," the spokesman added.
The Conservative MP for Bournemouth, Tobias Ellwood, said the revelations exposed "serious flaws" in the government's procedures.
"For me, if anybody is on a blacklist, this List 99, for sexual offences, they should not teach - there's no middle ground here.
"And I think Ruth Kelly needs to explain why some teachers, although blacklisted, are still able to end up in schools as in this case in Portchester School".