Trevor Biglin resigned from his post as director of sixth-form at Oulder Hill Community College, Rochdale, following newspaper revelations of an affair with a 17-year-old student Sally Roberts.
The News of the World claimed that Ms Roberts, who had been one of Biglin's English and law students, fell pregnant and had an abortion as a result of the affair.
Headteacher David Wilson said the school only found out 18 months after the event when the newspaper ran the story. "We immediately suspended Mr Biglin while investigations were pursued, but he chose to resign."
Mr Wilson said the college subsequently made the Office for Standards in Education fully aware of the situation, when they heard Mr Biglin had applied for a job as a part-time additional inspector at OFSTED.
OFSTED was not prepared to draw an inference from his alleged past on his suitability for the post, saying that he had made them awar of his situation when he applied for the job. He had supplied very good references from his last two previous employers.
"It is something we took into consideration when he applied," said a spokeswoman. "We take people on the basis of their experience and background."
Meanwhile, the Department for Education and Employment confirmed that following Ms Robert's allegations, Mr Biglin's future in teaching is under consideration. "Cases like this are reported to the Secretary of State for Education so we can consider whether the teacher should be barred," said a DFEE spokesman.
OFSTED was unable to say what it would do, if Mr Biglin was blacklisted from teaching. To its knowledge, the situation has not cropped up before. A spokeswoman said: "We would have to take advice on that".
Additional inspectors are usually on three-year contracts and work on a part-time basis up to a limit of 45 hours per year. They tend to work with HMI inspectors, following their background and area of expertise, in which case, it is likely that Mr Biglin will work within the sixth-form sector.