The Cabinet Office has been accused of trying to cover up details about Whitehall's knowledge of Cyril Smith's child abuse at the time he was granted a knighthood.
Documents released to the Mail on Sunday are reported to reveal that Margaret Thatcher was made aware of allegations involving the Liberal MP before he was given the honour.
The papers also show that the country's most senior civil servant wrote to the director of public prosecutions to find out why Smith did not face justice for alleged offences against teenage boys.
The 19-page dossier of information on the decision to confer a knighthood on former Rochdale MP Smith in 1988 included one undated letter, marked secret, from a member of the Political Honours Scrutiny Committee to Mrs Thatcher, warning of "the risk that such an award could give rise to adverse criticism".
In the letter Lord Shackleton spelled out that police had investigated Smith in 1970 for "indecent assault against teenage boys" between 1961 and 1966, but the Director of Public Prosecutions (DPP) had decided "there was no reasonable prospect of conviction".
In a second note to the prime minister, dated May 1988, admitted the committee had "some hesitation" about the award but "so far as we believe and have been able to ascertain, his past history or general character does not, in all the circumstances, render him unsuitable".
The then cabinet secretary Sir Robin Butler - now Lord Butler of Brockwell - wrote to the DPP on the committee's behalf to seek more information about Smith's case.
He said the committee wanted to know "whether the case against Mr Smith was not well founded: or whether it was a sound case, but that the evidence was not likely to stand up in court".
The newspaper said no reply from the DPP is recorded in the file.