The former Conservative politician who was wrongly linked to a child sex abuse scandal as a result of a Newsnight investigation agrees a settlement package with the BBC.

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Lawyers for Lord McAlpine indicated they were taking legal action after the programme led to the peer being mistakenly implicated in a paedophile ring that targeted children at a care home in Wrexham in north Wales.

In a statement on Thursday evening, Lord McAlpine said: "I have been conscious that any settlement will be paid by the licence fee payers, and have taken that into account in reaching agreement with the BBC,"

“We will now be continuing to seek settlements from other organisations that have published defamatory remarks and individuals who have used Twitter to defame me."

More from Channel 4 News: Can Lord McAlpine's Twitter pursuit succeed?

Earlier Lord McAlpine said the Newsnight investigation, which has fuelled a crisis at the corporation and led to the resignation of BBC Director-General George Entwistle, had left him devastated and got "into his soul".

It gets into your bones, it makes you angry, and that's extremely bad for you to be angry, and it gets into your soul and you just think there is something wrong with the world. Lord McAlpine

He added the whole matter could have been avoided if BBC investigators had called him and offered him the right to reply to the allegations before the report was aired.

'It was complete rubbish'

"They could have saved themselves a lot of agonising, and money actually, if they had just made that telephone call," Lord McAlpine told BBC Radio 4's The World at One programme.

"They should have called me and I would have told them exactly what they learned later on - that it was complete rubbish and that I had only ever been to Wrexham once in my life."

He added: "It gets into your bones, it makes you angry, and that's extremely bad for you to be angry, and it gets into your soul and you just think there is something wrong with the world."

Although the 2 November Newsnight programme did not name the peer - referring only to a senior Conservative from the Thatcher era - it quickly resulted in him being identified on internet blogs and social media sites.

The current affairs show later carried a full, on-air apology for the broadcast.

MacQuarrie report

An official report into the botched investigation by the BBC Scotland Director Ken MacQuarrie concluded that Newsnight staff failed to complete "basic journalistic checks".

Mr MacQuarrie also found there was confusion about who had the ultimate responsibility for "final editorial sign-off", adding the programme's editorial management structure had been "seriously weakened" as a result of the editor having to step aside over the Jimmy Savile scandal, and the departure of the deputy editor.

Although legal advice was sought over the report, no right of reply was offered to the unnamed individual at the centre of the allegation.

The programme featured an interview with Steve Messham, an abuse victim who said a senior political figure of the time abused him. He later said he wrongly identified his abuser and apologised.

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