Mike Granatt, the head of the Government Information and Communications Service (GICS), said that Campbell could use his special powers to give orders to civil servants to override the boss of COI Communications, Carol Fisher.
The government has played down the significance of a change announced in February under which the COI chief executive now reports to Campbell in a new government-wide advisory role.
But the full extent of Campbell's powers emerged when Granatt was questioned by the Wicks Committee on Standards in Public Life, which has launched an inquiry into the relationship between special advisers, such as Campbell, and civil servants.
Asked by Lord MacGregor whether Campbell's "power of instruction" over civil servants would extend to the COI chief, Granatt replied that it would. He added: "What I do not think is going to happen, or I am sure has not happened, is that the director of communications and strategy [Campbell] has issued, or will issue, instruction to the head of the COI about a campaign being conducted by the COI on behalf of the department of state."
Granatt said that if a dispute arose between Campbell and COI over an ad campaign, ministers would adjudicate.
If you have an opinion on this or any other issue raised on Brand Republic, join the debate in the Forum here.