The Mail on Sunday newspaper reported that Alys Harahap was suspended over a relationship with Julian Ponder, a Briton serving time in the Indonesian island's notorious Kerobokan prison for possession of cocaine.
"We can confirm that a member of staff has been suspended pending the outcome of an investigation into these allegations, which we take extremely seriously," a spokesman for the Foreign Office in London said, declining to comment further.
The news comes amid growing concern over another British prisoner in Bali, Lindsay Sandiford, a 58-year-old grandmother sentenced to death in 2013 after being caught trying to smuggle cocaine on to the island.
The attorney-general's office said last week it was ready to execute seven foreign drug convicts on death row after their appeals for presidential clemency were rejected.
Human rights group Amnesty International has urged clemency for Sandiford. It also wants Indonesia to commute all existing death sentences and impose a moratorium on executions.
Kate Allen, director of Amnesty UK, said: "Indonesia must stop the killing spree.
"Placing a middle-aged woman in front of a firing squad for carrying drugs -- apparently under coercion -- is simple brutality.
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