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.