Northern Ireland Secretary Julian Smith has requested an internal review of a decision to remove a portrait of Queen Elizabeth from Stormont House.
It emerged earlier this month that the portrait had been removed from the Northern Ireland Office (NIO) base in Belfast after compensation was paid to a civil servant over it.
Lord Maginnis told the House of Lords that a civil servant had been paid £10,000 in compensation for being offended at having to walk past portraits of the head of state and her husband, the Duke of Edinburgh.
British Prime Minister Boris Johnson was said to have appeared "puzzled" when told of the removal of the portraits during a meeting with the Ulster Unionist Party earlier this week.
Reg Empey, who was among the Ulster Unionist delegation, said: "He immediately looked puzzled and looked around in each direction for some guidance from officials on either side of him. One intervened with a comment about it being a personnel issue."
Unionists have urged Mr Smith to act to reinstate the portraits.
It is understood that it is the intention of the Secretary of State to reinstate the portraits.
Speaking earlier this week, DUP MP Gavin Robinson said: "The portrait should be reinstated forthwith", while UUP MLA Doug Beattie said "it is only fitting" that the portraits be on display to "both reflect and respect the constitutional reality of the sovereignty of the United Kingdom in Northern Ireland".
A UK government spokesman said: "The Secretary of State has requested an internal review on this issue which will report in due course."