At an industrial tribunal reflecting increasingly badly on standards within the CSA, Stephen Davies said the woman was sleeping with a man while her husband, another CSA official, was away on business.
Earlier, the hearing degenerated into farce when a pair of skimpy underpants, said to have been given to Mr Davies by the woman - Mrs A, aged 35 - was produced as evidence of her infatuation with him.
Mr Davies has told the hearing in Birmingham that the woman accused him of sexual harassment last year because he refused to succumb to her sexual advances. He was cleared, but was sacked in March for alleged managerial harassment of two other women in his office at Dudley, West Midlands. He claims the CSA was vicariously liable for the woman's behaviour.
Amid increasingly bizarre claims and counter-claims of affairs, office parties and sexual misbehaviour, Mr Davies, 39, an operations project manager, said: '(Mrs A) told me she was still seeing a married man with whom she was having a relationship before she met (her husband). She took great delight in telling me she was seeing this man while her husband was working away. I asked her not to discuss this in front of me because I was very offended.'
He also alleged that Mrs A had twice made unfounded allegations of sexual harassment against men when they refused to sleep with her.
However, observers were astonished when his representative, Peter Henrick, said: 'I don't want to present you as an angel or a paragon of virtue. Have you had extra-marital affairs?' With his wife, Diane, another CSA official, sitting only feet away, Mr Davies replied: 'Yes, I have.'
Alastair Smail, counsel for the CSA, accused Mr Davies of having an intolerant and bullying management style and alleged that he had fabricated evidence of Mrs A's sexual harassment of him.
'One characteristic of this style is the belief on your part that you have the right to sleep with anyone on your staff on whom you choose to confer the honour,' he said.
Mr Davies described the suggestion as 'disgusting'.
Mr Smail alleged that Mr Davies was having an affair with an official from the Department of Social Security office in Newcastle, and that he had helped get her a job in Dudley - allegations that Mr Davies rejected.
He also denied suggestions by Mr Smail that he had tried to sleep with two other staff members during CSA social events, on one occasion asking Mrs A to recruit one for his bed. An order has been made by the tribunal banning the reporting of the women's names.
Mr Smail said Mr Davies's portrayal of himself as a devoted family man was 'nauseating hypocrisy'.
Mr Davies's production of the red and white briefs resulted in much hilarity among observers, while the panel of two middle-aged men and a woman admitted them as evidence with straight faces.
Mr Davies said Mrs A had given them to him for his birthday in April 1993, with the words: 'One day I'll get you to show me these on you. You'll give in in the end.' They were still wrapped in birthday paper.
Mr Smail said: '(Mrs A) says you entirely fabricated this story and that she never bought them for you. What intrigues me is that you brought them in still in their gift paper. Are you seriously inviting the tribunal to believe you really kept the gift paper?'
Other claims made by Mr Davies, that Mrs A tried to get him into her hotel room and that she invited him to her home for sex, were also fabrications, Mr Smail said.
The hearing continues