A former bodyguard to Margaret Thatcher claims he warned her one of her top aides, Sir Peter Morrison, allegedly held sex parties with under-age boys.
Barry Strevens, who is also an ex-detective chief inspector for Cheshire Police, said he passed on the allegations immediately.
But despite learning of the rumours he claimed Lady Thatcher appointed Sir Peter deputy party chairman of the Tory party. He died in 1995 but has since been linked to child sex abuse claims in North Wales.
Mr Strevens told the Sun on Sunday (£): "I am sure he would have given her assurances about the rumours as otherwise she wouldn't have given him the job."
Tory grandee Lord Tebbit has previously said he confronted Sir Peter over the allegations and received a flat denial.
A full-scale investigation into claims of an alleged paedophile ring in Westminster is now underway.
Earlier this month Ex-Tory activist Anthony Gilberthorpe also claimed Thatcher knew about alleged illicit sex parties within her party.