The BBC has settled with Lord McAlpine over a libel claim concerning allegations of child abuse made on the Newsnight programme which implicated the former Conservative politician.

The damages amount to £185,000 plus costs. The agreement will be announced in open court in a matter of days.

Lord McAlpine commented: "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."

Following the Newsnight broadcast earlier this month, the former Conservative Party treasurer Lord McAlpine rapidly became the subject of a number of allegations on social media sites, despite the fact he was not named by the programme. McAlpine subsequently described the allegations as "seriously defamatory".

The scandal has placed renewed scrutiny on the legal implications of comments posted on social media sites such as Twitter, with McAlpine's solicitor, RMPI's Andrew Reid, urging Twitter users who named his client to come forward and apologise.

Reid, who is representing McAlpine alongside former solicitor general Sir Edward Garner QC, has said that online and mainstream users have been identified and will be pursued for damages.

The episode marks the latest incident to highlight the role of social media users as legally liable publishers.

Addleshaw Goddard head of media litigation David Engel commented: "Some Twitter users appear to think that they are above the law, but the internet is not a law-free zone. Legally, there is very little difference between publishing on social media and in newspapers or on TV.

"From a libel law perspective, it does not matter if the subject is not actually named, if he is readily identifiable from the information that is provided about him. It is a classic case of jigsaw identification that has left the BBC in a tricky position."

The scandal has also turned attention to the BBC's in-house legal team, raising questions over the process by which programmes are approved by the broadcaster.

Berwin Leighton Paisner litigation partner Graham Shear said: "There is little doubt that a BBC lawyer would have reviewed the programme and 'greenlit' the broadcast. It has been suggested that there may have been a failure either in that assessment or in the information provided to be assessed.

"But I would not be surprised if the lawyer or lawyers in question faced pressure to give the go-ahead. They would have faced a difficult task with limited information or corroborating material to revert to."

For more, see The BBC, Lord McAlpine and libel law.