Since semester started, a female student has been attending classes scantily clad or wearing clothes that are too revealing, like a sport bra without shirt on top, booty shorts, semitransparent silk blouses without a bra, or even a bikini (this situation happened only once.) She does this once or twice every month and, apart from wearing revealing clothes, she behaves as any other student. My university is located in a fairly liberal country and I'm not a prude. There is no written dress code. During summer, crop tops and shorts are the norm.
In a previous question, someone brought about an issue regarding a student wearing an offensive shirt, but the answers to that question doesn't apply here. First, what the student is doing isn’t illegal like wearing a racist slogan and she isn’t underage; second, in the linked question, the TA was a female who feared becoming a victim of aggression. In my case, I am the male and I fear the if I tell the student I am not comfortable with her clothing, she might consider it harassment; third, she does this in plain view, not only in my class, and not during office hours (like here) so I don't have reason to believe I've been somehow targeted be her.
This situation is disrupting the teaching environment - students start talking and leering instead of following the class. I have noticed that my students' level of attention and the class speed is significantly lowered when she comes wearing revealing clothes. It may cause issues outside the classroom, too. Recently, during my office hours, one student asked me my opinion on her, to which I replied that, as a TA, I had to remain non-judmental (and that he didn’t have authority to ask such questions.) Then the student told me rumor has it I haven’t intervened because I enjoy watching the student expose herself. You get here the subtlety of my situation: If I intervene, the student may consider I'm harassing her; if I don’t, I could become that perv who likes peering at his student.
The department’s head says that I can let the bikini pass once, but that he will intervene if it happens again. He cannot do anything regarding silk blouses or sport bras, though. He will intervene only if the situation escalates, but I have authorization to intervene by myself to guarantee the class objectives are achieved.
Am I overreacting? If I let things go on as normal, will my students eventually assume I don’t care? If I'd have to talk to the student, how is the best way to address the situation considering gender issues?
EDIT: It's true what StrongBad says, that the other students have their part in disrupting, but I'm certain that the student wearing revealing clothes also wants to elicit a reaction (whether it is disrupting the class, I don't know.) We are in winter now, so she comes fully clothed, changes her clothes once in the building and always sits where everybody sees her. Outside classes, she is fully clothed. Her behavior is 100% intentional and she knows that when wearing that kind of clothes the environment of the class will accordingly change.
UPDATE: I’m a bit surprised that none of the upvoted answers address any of my questions. Most of them are on the line of “do not be judgmental and tell the other students to behave”, which is what I have done: My approach has been not to brought additional attention on her. If someone is giggling, I would call his attention in general terms, but I would never expose the student in front of her peers with a sentence like “Stop looking at her clothing and pay attention to me”. That would be harassment. It’s also true that the student has the right to wear whatever she wants, and that other students should behave, but human concentration has its limits and I cannot blame anybody for that. If a disruption is too constant and obvious, students will eventually fall. Stephan Kolassa made an analogy that I'll borrow here: “Everybody is within their rights not to shower. But if someone stinks so badly that other students cannot concentrate, I would say the instructor should attempt to change that one person's behavior - not expect that the entire rest of the class adapts their utterly normal reaction.” Pete L. Clark has also a good point when saying “the instructor can actually talk with the student and get her to understand why what she's doing is almost certainly not in her own best interest”. That would save the student some headaches in the future and allow me to appropriately teach my class. Furthermore, my department's head is well informed about the issue and has given me authorization to talk with the student. So now the onus is on me. To avoid starting a bureaucratic storm, most classroom problems (I think almost every problem in an academic or business settings) are solved in a bottom-up fashion. First TA intervenes and if it doesn't work, you escalate to the next level.
RESOLUTION: After many months, I'm writing again to tell what happened, but I can't give many details. After finals the student offered sex to another male TA. We had all made complains by then and got writing answers; we had our *ss covered. The student has been suspended. Moral of the story: get instructions in writing.