A 'sex-for-asylum' scandal at the UK's largest immigration processing centre has been uncovered by an Observer investigation, piling more pressure on a government already reeling from a series of Home Office bungles.

Evidence obtained by this newspaper reveals how a chief immigration officer at Lunar House in Croydon, south London, targeted an 18-year-old Zimbabwean rape victim over a two-week period in which he offered to help her with her application to claim asylum in the UK and made it clear that he would like to have sex with her.

Last night the Home Office announced it had suspended an official at the centre following The Observer's allegations and said it was launching a full investigation.

The exposé is the latest in an increasingly long line of scandals to hit the embattled Immigration and Nationality Directorate (IND) and comes just two months after an official report urged an overhaul of practices at the centre to prevent such abuses taking place.

James Dawute, 53, picked the teenager called Tanya (her surname has been withheld at her request) out of a queue of asylum seekers and asked for her telephone number, promising to help her with her application.

Through subsequent text messages and mobile phone calls Dawute made it clear he was attracted to the teenager and requested her bank details so that he could put money into her account. He then encouraged her to return to Croydon to meet him last Wednesday.

During the subsequent 90-minute meeting with the asylum seeker, in which she discussed having sex with Dawute in return for his help, he claimed he knew 'how to win her case'. When asked for guarantees that he could help her, he tells her to come to a hotel with him. 'I will tell you when we are alone because you are going to have sex,' he said.

At no stage during the meeting - recorded by The Observer - does Dawute make any claim that he will break the rules to help Tanya. But the fact he was attempting a relationship with the teenager, and that, as a chief immigration officer, he claimed he could 'handle' her application, is a flagrant breach of immigration service guidelines and a clear conflict of interest.

During the meeting he offers to coach Tanya on her asylum interview so that she can give the correct answers. He also offers to insert a revised summary of her asylum claim into her file with a view to improving her chances at appeal.

Last night politicians from all parties expressed concern at the revelations. David Davis, the shadow Home Secretary, described them as 'disgraceful and shocking'. Davis referred to similar allegations made in the Sun in January, which prompted an official investigation by the IND and a call for management at Lunar House to clamp down on possible abuses. 'It's doubly shocking that the government had already been warned of such goings on,' Davis said. 'Their inquiries neither caught any transgressors nor clearly did it prevent this shameful practice going on.'

Tomorrow Davis will table a series of parliamentary questions to 'get to the bottom of this disgraceful incident'.

'This kind of case is the worst mixture of sexual exploitation and grotesque bullying imaginable and needs to be rooted out instantly,' said Nick Clegg, Liberal Democrat home affairs spokesman. 'Evidence of corruption in the immigration service is a matter of the utmost seriousness. It will be a body blow to whatever is left of the credibility in this area if incompetence is supplemented by corruption.'

Harris Nyatsanza, a human rights activist who fled the Mugabe regime in Zimbabwe, said Tanya's story raised serious questions. 'I hope that after a thorough investigation - not a whitewash - there will be time to engage with asylum seekers so that this problem does not reappear in the future.'

When confronted by The Observer, Dawute denied attempting a sexual relationship with the teenager or offering to help her with her claim. In subsequent phone calls he claimed he was merely trying to help put her in touch with an immigration charity. He denied having the power to influence her asylum application. 'She's a vulnerable rape victim,' Dawute said. 'I wouldn't want to have sex with her. I'm the father of four kids.'

Last night a Home Office spokesman confirmed Dawute had been suspended. 'We are aware of the allegations made by a Sunday newspaper against a serving member of the Home Office,' the spokesman said. 'An official has been suspended pending a full investigation by the Immigration and Nationality Directorate. It expects the highest levels of integrity from its staff and any suspicions of corruption are investigated fully.'

Watch the video clips of James Dawute's meeting with the 18-year-old asylum seeker:
Clip one (WMV 1:20)
Clip two (WMV 1:20)