Heath, who was prime minister for four years in the 1970s, is the highest-profile figure to be embroiled in historical abuse allegations against prominent figures.
Britain`s Independent Police Complaints Commission is looking into whether Wiltshire Police followed up a claim against Heath, which was made in the 1990s.
Meanwhile an alleged victim, now aged in his 60s, has claimed he reported being sexually assaulted by the Conservative MP in 1961, but was branded "a liar and a fantasist".
The boy, who claimed to have been abused throughout his childhood by his father and his pedophile friends, said Heath picked him up along the A2 road in north Kent as he hitched a lift.
He claimed to have gone back to an apartment in Park Lane, London where he was raped, the Daily Mirror reported on Monday.
It was not until 1965 that he realised who his abuser was, recognising him from a picture in a newspaper in which Heath was standing beside Margaret Thatcher.
In statements to his legal team reported in the newspaper he said: "I learned that he was MP for Bexley. This answered a lot of questions as to why no one believed me about the London saga. I got called a liar and a fantasist."
The Metropolitan Police declined to comment on the claims.
Wiltshire Police have appealed for potential victims of Heath to come forward, after launching an inquiry on the back of allegations made by a retired senior officer.
Superintendent Sean Memory of Wiltshire Police said: "The allegation is that a trial was due to take place in the 1990s and information was received in that trial that Sir Ted Heath was involved in the abuse of children, and the allegation is from the result of that information that the trial never took place.
"A retired senior police officer has come forward towards the end of 2014 indicating that they were aware of this information.
"This is an appeal for victims in particular."
An IPCC spokesman said it will investigate allegations concerning the force`s handling of an "alleged claim of child sexual abuse made in the 1990s".
He added: "It is alleged that a criminal prosecution was not pursued when a person threatened to expose that Sir Edward Heath may have been involved in offences concerning children.
"In addition to this allegation, the IPCC will examine whether Wiltshire Police subsequently took any steps to investigate these claims."
Labour MP Tom Watson claimed he received information relating to allegations of child abuse involving Heath in 2012.
"A separate claim concerning Heath was made to me subsequently.
"I passed them both to the police, who have confirmed to me that at least one of those allegations is being investigated and taken seriously."
Heath, who led the Conservative government between 1970 and 1974, never married and was famously reticent about his private life.
One biographer concluded that he may have been a latent or repressed homosexual while another thought he was "pretty well sexless".
Away from politics he was noted for his enthusiasm for sailing and classical music.
Heath died at home in Salisbury aged 89 in July 2005.
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