Sir Gavin Williamson allegedly told a senior civil servant to "slit your throat" in what they claimed was a bullying campaign while he was Defence Secretary.
Rishi Sunak is under increasing pressure over his decision to bring his ally back into Government after reports of fresh incendiary claims about his conduct.
The Ministry of Defence (MoD) official said Sir Gavin made the remarks in front of colleagues in a meeting, and on another occasion told them to "jump out of the window".
The Cabinet Office minister said he "strongly" rejects the allegation and insisted he has "enjoyed good working relationships" with officials.
But the allegations, reported by the Guardian, including that Sir Gavin "deliberately demeaned and intimidated" the civil servant on a regular basis, is bound to add to the calls for his sacking.
The Prime Minister is under fire for bringing Sir Gavin back into the Government when he knew he was under investigation for allegedly bullying former chief whip Wendy Morton.
In a series of expletive-laden texts exposed over the weekend, Sir Gavin accused Ms Morton of seeking to "punish" MPs out of favour with then-premier Liz Truss by excluding them from the Queen's funeral, warning: "There is a price for everything."
Sir Gavin, who was sacked as Defence Secretary in 2019, issued a statement denying the broad allegations in The Guardian's report but did not specifically deny using the language alleged.
"I strongly reject this allegation and have enjoyed good working relationships with the many brilliant officials I have worked with across government," he said.
"No specific allegations have ever been brought to my attention."
The newspaper said the official, who later left government, complained to the MoD's head of human resources about the alleged incidents, but it was understood the Cabinet Office's propriety and ethics team has not received a complaint about Sir Gavin's conduct towards officials.
A Cabinet Office spokesman said: "The Cabinet Office has not received notice of any formal complaints about Gavin Williamson's behaviour from his time at the Ministry of Defence or any other department."
Labour Party chairwoman Anneliese Dodds said: "These allegations are extremely serious and speak to the toxic culture at the top of the Conservative Party."
Earlier in the day, Mr Sunak was defying calls to sack Sir Gavin despite conceding his messages to Ms Morton were "not acceptable".
The Prime Minister said he would not be "passing judgment" until after an "independent complaints investigation", understood to be the internal investigation launched by the Tory party.
"I want to see the results of that, obviously, but I've been very clear that language is not right, it's not acceptable," he told broadcasters at the Cop27 climate summit in Egypt.
"And that's why I welcome the fact that Gavin Williamson has expressed regret about that and now wait to see what the investigation says.
"There's an independent complaints process that's being conducted at the moment. It would be right to let that process conclude before making any decisions about the future."
Former Conservative Party chairman Sir Jake Berry said he informed Mr Sunak on the day he took the reins as Tory leader that Ms Morton had lodged a formal complaint over the messages.
The Prime Minister went ahead with the appointment the next day, with Downing Street citing his belief that Sir Gavin would make an "important contribution" to Government.
Mr Sunak has insisted he was unaware of the details of the exchange at the time he brought Sir Gavin back into Government, in the vague role of minister without portfolio.
Asked on Monday if Mr Sunak had full confidence in the Cabinet Office minister, his official spokesman said: "Yes."
Pressed on why the PM gave Sir Gavin the job, the spokesman added: "Obviously he thinks he has an important contribution to make to Government."
Labour leader Sir Keir Starmer said the twice-sacked minister is "clearly not suitable" for the job and Mr Sunak appointing his ally to Government shows he is "weak".
Liberal Democrat chief whip Wendy Chamberlain said the Cabinet Office minister should be fired, as "in any other workplace, someone who behaved as he did would have been rightly dismissed for gross misconduct".
The Prime Minister's spokesman said Mr Sunak has a zero-tolerance approach to bullying inside Government but would not commit to a timeline for appointing a new ethics adviser.
"There is a process ongoing. We'll update you as soon as possible," he said.
Sir Gavin, who was knighted by Boris Johnson earlier this year, is a divisive figure at Westminster where he is viewed with suspicion by many Tory MPs because of his reputation as an inveterate plotter.
He was sacked first by Theresa May as defence secretary for leaking details of a National Security Council meeting, and then by Mr Johnson as education secretary over the Covid-19 A-levels debacle.
However, he was regarded as a key figure in Mr Sunak's campaign over the summer to become party leader.
