The department has responded to requests from Telford & Wrekin Council, campaigners, and the borough's MP Lucy Allan, by saying that any further review into abuse in Telford should be commissioned by the local authorities.
The Home Office also said that issues affecting Telford will be covered by the national Independent Inquiry into Child Sexual Abuse (IICSA).
Telford child sexual exploitation: New abuse ‘could not go undetected’ today
Ms Allan had been pressing for an independent dedicated inquiry into grooming gangs and child sexual exploitation in the town since 2016.
On Tuesday Telford & Wrekin Council also switched its position and submitted its own request to the Home Office to commission a dedicated independent Telford inquiry.
That came after mounting pressure following a report from the Sunday Mirror suggesting that there had been as many as 1,000 victims in the town over the past 40 years.
However, a Home Office spokesman has said the IICSA would look at failings by institutions in towns and cities across the country, including Telford.
The spokesman added: "It is for the authorities in Telford to decide whether a further review is necessary."
An inquiry into similar issues of child sexual exploitation in Rotherham was commissioned by the local council rather than the government.
The Home Office spokesman said: "This was a truly terrible case of some of the most vulnerable in our society being preyed upon by ruthless criminals. This government is working to tackle child sexual exploitation, declaring it a national threat and making significant investment to protect children, support victims, and bring perpetrators to justice."
He added: "The government launched the Independent Inquiry into Child Sexual Abuse to get to the truth, expose what has gone wrong and learn lessons for the future.
"This includes institutional responses to child sexual exploitation by organised networks, such as those in Telford.”
The Home Office also said it was satisfied that Telford & Wrekin is not a council in denial over the issue.
In a statement it said: "Single-agency inspections undertaken by HM Inspectorate of Constabulary and Ofsted have highlighted that while there have been clear problems in the past, and criticisms of police (and other services), there is acknowledgement that services have responded to the original failings, and improvements can be seen.
"Telford and Wrekin Council's own scrutiny committee undertook a robust review of its response, which does not suggest it is a council in denial."
It added: "West Mercia Police, children's services, health leaders and to the Local Government Association have provided assurance that they acknowledge the scale of the problem and past failures; and that they are determined to tackle the problem, and are working together to achieve this."