Defence Secretary Philip Hammond has insisted ex-military chiefs have "no influence" over MoD procurement but promised an investigation into claims some said they could get access to key decision makers.
Retired senior officers are said to have offered to wield influence in Whitehall to undercover Sunday Times reporters posing as weapons manufacturers looking to sell unmanned drones to the UK.
Former head of the Army Lord Dannatt - who was an adviser to David Cameron before the 2010 election - told the Sunday Telegraph he was offered an £8,000 monthly fee to approach senior MoD figures.
He refused the money but did offer to "facilitate conversations", he said, as he was told the hardware could save lives.
"These allegations represent a totally false picture," he said. "I was interested because they were purporting to be developing technologies that could save people's lives. I said I could facilitate conversations with people in the military. I did not offer to lobby anyone on their behalf."
As many as five other figures are said to be have been approached as part of the operation.
In a statement, Mr Hammond said: "Equipment is procured in the interests of our armed forces and not in the interests of retired personnel. Former military officers have no influence over what MoD contracts are awarded."
An MoD spokesman said it would be "looking to see if any of these individuals have broken any rules" and putting in place measures to ensure there was no possibility of privileged access.
Retired personnel are subject to rules set by the independent Advisory Committee for Business Appointments.
"It is clear that former chiefs acting in a commercial capacity should not have any privileged access to the MoD and we will be putting in place measures to ensure this," he said. "We are focused on ensuring best value-for-money for the taxpayer and delivering the best equipment for the Armed Forces. A rigorous process is used for the approval of all equipment projects which involves non-advocate scrutiny of all major investment decisions by an investment approvals committee which provides advice to ministers and the accounting officer."