Oliver Letwin will be investigated by the office of the Information Commissioner after he was discovered throwing official documents and letters into bins close to Downing Street.
Letwin, who is seen as David Cameron's right-hand man and advises the Prime Minister on almost every aspect of government policy, was photographed by The Daily Mirror dumping official documents and letters on five separate occasions.
Mr Letwin will now be examined by the Information Commissioner's Office amid suggestions that he may have breached protection laws by dumping the papers.
Downing Street said Letwin had promised not to throw official papers into public bins in future.
The Daily Mirror says the West Dorset MP discarded more than 100 papers, including correspondence on terrorism and national security as well as constituents' private details, including home addresses and phone numbers.
"We are aware of the allegations and are making inquiries," said a spokesperson for the Information Commisioner's Office.
"Keeping personal data secure is a key principle of the Data Protection Act and the ICO takes any breach of that principle very seriously."
On one occasion, Letwin was pictured handing the documents to a cleaner holding a bag. He tore the papers but did not shred them, meaning they were still legible.
"Mr Letwin sincerely apologises to any concerned constituents and would like to make assurances that he will no longer dispose of copies of documents and constituency correspondence in this way," said a spokesperson for Mr Letwin.
"Oliver Letwin does some of his parliamentary and constituency correspondence in the park before going to work and sometimes disposes of copies of letters there. They are not documents of a sensitive nature," she added.
The papers are said to date from July 2010 to September 2011, including five letters from the Intelligence and Security Committee, while another paper refers to links between al-Qaida and Pakistan and discusses how the government is working to "keep Pakistan stable and to minimise the risk of al-Qaida and others like them being able to use this extremely troubled part of the world as a base from which to attack the UK," the newspaper said.
Cameron, Deputy Prime Minister Nick Clegg and Chancellor George Osborne are all said to be mentioned in the dumped papers too.
When asked his views about Letwin, it is thought he said "Clearly, it's not a sensible way to dispose of documents. Mr Letwin has agreed he will not dispose of documents in this way again," according to a spokesperson.
For serious breaches of the data protection act the information watchdog can issue fines of up to £500,000.