The Department for International Development said late Friday that the charity had shown a "lack of judgement" in investigating allegations that young sex workers were hired by staff.
"The International Development Secretary is reviewing our current work with Oxfam and has requested a meeting with the senior team at the earliest opportunity," a DFID spokeswoman said.
"The way this appalling abuse of vulnerable people was dealt with raises serious questions that Oxfam must answer."
Oxfam has denied it organised a cover-up after it emerged senior aid workers in Haiti used prostitutes following the devastating 2010 earthquake.
The charity said it launched an investigation "as soon as we became aware of the allegations" in 2011 and "publicly announced" its outcome while keeping trustees, the Charity Commission and the Department for International Development informed.
In a statement, Oxfam said: "The behaviour of some members of Oxfam staff uncovered in Haiti in 2011 was totally unacceptable, contrary to our values and the high standards we expect of our staff.
"As soon as we became aware of the allegations we immediately launched an internal investigation.
"Allegations that underage girls may have been involved were not proven."
The organisation, one of Britain's largest charities, also revealed four members of staff were dismissed as a result of its investigation and three others resigned before it concluded.
The charity neither confirmed or denied the allegations, but said its misconduct findings had related to offences "including bullying, harassment, intimidation and failure to protect staff as well as sexual misconduct".
An unnamed source quoted in the Times report claimed the aid workers invited groups of young prostitutes to a guesthouse for parties, with some of the sex workers wearing Oxfam T-shirts.
The newspaper's investigation also said that while Oxfam had informed the Charity Commission of the "broad nature" of allegations, it failed to provide details or a final report.
Individuals closely implicated in the scandal went on to take leadership roles in other charities, which were not informed of the reasons they left Oxfam and even given glowing references, the investigation added.
The Charity Commission spokeswoman said: "The public expects charities to be safe and trusted environments that safeguard those who come into contact with them.
"Allegations such as those involving Oxfam staff risk undermining public trust.
"We will expect the charity to provide us with assurance that it has learnt lessons from past incidents and is taking all necessary steps to safeguard all who come into contact with it."
Oxfam said it has now set up a whistleblowing hotline as a result of its 2011 investigation.
It said: "After the investigation, we carried out a thorough review of the case which resulted in the creation of our dedicated Safeguarding Team and a confidential 'whistleblowing' hotline as part of a package of measures to ensure that we do all we can to protect our staff, prevent sexual abuse and misconduct happening in the first place and improve how we handle any allegations."
The Haiti disaster killed 220,000 people and left millions homeless.