Olukemi Christine Onoade, 45, was sacked from Queen's Hospital in Romford, Essex after the baby was found locked in a stationery stockroom during a night shift in April, 2011.
It was alleged that another member of staff found the tiny baby face down after vomiting.
The baby survived but Onoade, who denied the claim, was sacked by Barking, Havering and Redbridge University Hospitals NHS Trust.However, the mother-of-two was later reinstated on appeal and given a written final warning.
She has now returned to work on a labour ward at King George Hospital in Goodmayes, Essex after the Nursing and Midwifery Council's Investigating Committee ruled that she could work under strict supervision and only for the Trust who disciplined her.
The Daily Star reports a 'King George insider' as saying the decision is wrong.
"I think it is wrong she has returned to work. Women are coming into the maternity ward and are placing their trust in staff here to deliver their babies in the safest possible environment," the unnamed source said, "They will be appalled to find out one of the midwives is working here while she is still facing allegations that she showed such a gross lack of care."
The committee said at the time of its ruling that Onoade had a 'degree of culpability in allowing a vulnerable infant to be left in an unsafe environment' and considered there was a 'risk of repetition and a real risk of serious harm to the health and well-being of patients in her care if she is allowed to work with no restrictions'.
In November, the NMC's disciplinary panel told Onoade she would have to submit a performance review from her line manager by the end of January.
Her lawyer had told the hearing that Onoade in in 'financial hardship' and asked for permission to be granted to allow her to also work as an agency midwife, but this was refused on the grounds that she would not have enough supervision.