Liam Fox and his close ally Adam Werritty are facing the threat of investigations into whether their fund-raising activities broke the law.
Police and the Electoral Commission have been asked to probe allegations that the former Defence Secretary and Mr Werritty committed offences by misleading donors and failing to declare funding.
Meanwhile, the Government has signalled that it will look at wider problems with the lobbying system in the wake of the scandal.
An inquiry by the Cabinet Secretary will reportedly recommend that ministers publicly disclose all meetings with lobbyists and business figures in future.
According to the Daily Telegraph, Sir Gus O'Donnell will warn that a "grey area" in the rules allowed Dr Fox to hide the closeness of his relationship with Mr Werritty by insisting he was not on official business. A new statutory register of lobbyists could also be introduced within months.
The results of Sir Gus' report are due to be published on Tuesday, but could be delayed if police launch a probe.
Newly-installed Defence Secretary Philip Hammond attended his first official engagement alongside David Cameron at Wootton Bassett on Sunday. Mr Hammond is already fending off efforts to embroil him in the controversy, with claims that he also received hospitality from Michael Hintze - a prominent backer of Dr Fox.
Businessman Mr Hintze hosted Mr Hammond at several dinners before and after the election, which were openly declared.
Venture capitalist Jon Moulton is understood to have approached the Cabinet Secretary to complain at being "misled" by Dr Fox. Mr Moulton said the Cabinet minister asked him to donate to Pargav, a not-for-profit company set up by Mr Werritty. He was apparently told the firm helped provide "security and analysis" and was unaware it was funding Mr Werritty's travel to meet Dr Fox on official trips.
There are reports that those giving money to Pargav had been promised anonymity, which could breach tough laws on declaring donations.